1920-06-11

PAPERS TABLED.

[Stage Direction]
Copy of Order in Council dated December 18, 1919, regarding the distribution to the provinces of the sum of $200,000 which was placed at the disposal of the Department of Health-Hon. Mr. Rowell.
Report of the Printing Bureau in French. -Hon. Mr. Sifton.

[Stage Direction]
On the Orders of the Day:
Mr. P. F. CASGRAIN (Charlevoix-Mont-morency):: Mr. Speaker, I beg to draw the attention of the Government, and particularly of the Minister of Railways and Canals, to a fact which I discovered the other day when I happened to be in my county. I hold in my hand the time table of the Quebec and Saguenay Railway, and I find at page 2 a certain reference to all the special summer resorts along the line of that railway. All of these stations are mentioned except St. Irenee, and I am surprised at this omission.


Mr. SPEAKER:: Order. The statement
which the hon. member is making is not of such character as ought properly to be brought to the attention of the Government on the Orders of the Day. Only matters of general application, which are of countrywide interest and of urgent importance, can be brought to the notice of the Government on the Orders of the Day, and the hon. member is therefore not in order at the present moment.


Pierre-François Casgrain: I bow to your ruling,
Mr. Speaker, but I beg to submit that the matter is one of the utmost urgency by reason of the fact that the time table has already been printed and has been distributed all over the country. .


Edgar Nelson Rhodes: It will serve the purpose of the hon. member equally well if he will communicate with the Minister of Railways.



WORK ON LACHINE CANAL.

[Stage Direction]
On the Orders of the Day:
Mr. J. A. LEDUC (Westmount-St. Henry):: I should like to know from the Minister of Public Works whether it is the intention of his department to continue the work already started on the Lachine canal in connection with the syphons that convey the water from the little river St. Pierre. This work has already been commenced and I should be glad if the minister would say whether he intends to proceed with it this summer. ' Furthermore, I would ask if the Government will pay part of the damages caused by the flood last spring in my constituency.


Edgar Nelson Rhodes: Questions of this character should be submitted when the Estimates of the department are under consideration. They are not of sufficient, general public importance to warrant their being

raised on the Orders of the Day. However important they may be to those directly concerned, they are of purely local application.


Rt. Hon. Sir ROBEET BORDEN (Prime Minister):: In the meantime, Mr. Speaker, I shall direct the attention of the minister to what my hon. friend has stated.



TORONTO POSTAL EMPLOYEES.


[Stage Direction]
On the Orders of the Day:
Mr. CHARLES SHEARD (South Toronto):: I desire to ask whether the Government has received any communication in regard to a threatened strike amongst the postal clerks and letter carriers in the city of Toronto and other places and, if so what answer they have made or intend to make in reply.


Mr. McMASTER:: This is purely local.


Mr. LAPOINTE:: It is a strike in Toronto.


Mr. ARCHAMBAULT:: Purely local.


Pierre-François Casgrain: Write to the Post Office Department.


Edgar Nelson Rhodes: The question submitted by the hon. member for South Toronto (Mr. Sheard) has general application to letter carriers throughout the country.


Mr. BUREAU:: Toronto is just a village.


Hon. N. W. ROWELL (President of the Privy Council):: While neither the Post Office Department nor the Government has recently received any direct communication from the letter carriers themselves in reference to the matter, communications have been received from other bodies in the city of Toronto. So far as one can judge from those communications and from the newspaper despatches, the complaints appear to be based on three grounds: First, there is some complaint about the present Bill, and I am at a loss to understand what it can be, because the Bill which was passed through this House and which went to the Senate is wholly in the interests of the Civil Service employees and carries a classification which will increase salaries, dating back to the 1st of April, 1919, instead of from the 1st of April, 1920. If there is any objection to that Bill and the employees do not wish it, some millions of money would be' saved to the country if the measure were not put through. The second complaint is that the Government changed the classification. The Government has not
[The Speaker.]
of its own motion made any change whatever in the classification pertaining to the postal service. In so far as there have been any changes, they have been due to appeals made by certain classes of the postal employees against the classification as approved by Parliament. These appeals have been heard by the Board of Hearing, upon which the civil servants are themselves represented, and among their representatives is one of the trusted employees of the Post Office Department. These .appeals have been heard by the Board of Hearing and subsequently passed upon by the Civil Service Commission, and the Government has in every case approved the decision arrived at. So that if there have been any changes they have been made on the initiative of the postal employees themselves and have been recommended by the Board of Hearing, on which, as I say, the civil servants are represented. The third complaint seems to be in reference to the compensation of letter carriers. They seem to think that there should be some better compensation than that which is now provided, and I purpose giving to the House a statement of what the letter carriers will receive this year on the basis of the Bill which passed through Parliament the other day. Under the old classification the range of salaries for letter carriers ran from $626 to $939, plus allowance in respect of clothing and transportation. The new classification is $780 to 1,260, plus bonus, because the classification itself recommends that the bonus should be added. There is also allowance for clothing and transportation. Under the new classification any letter carrier who was at the maximum of his class on the 1st April, 1919, will this year receive the following pay and allowance: If he is the head of a household he will receive salary and bonus, $1,560 plus allowance, covering clothing, boots and transprotation. So that the House may appreciate what that means I will point out that each letter carrier receives a new serge suit every year, that is coat and trousers; a pair of cloth trousers every year, a cloth coat every second year, a new oivercoat every second year, and two pairs of boots every year.


Jacques Bureau: Do the boots he gets cost nine dollars a pair?


Newton Wesley Rowell: No, $8 a pair. And he receives many other articles, such as a cloth cap every second year, a felt hat every second year, a fur cap every four years, etc. He has street car transportation to and from work .and at his work. These allow-

ances for clothing and transportation to and from work constitute a substantial addition to his salary, which estimated at what they would cost him a day if he had to buy them himself would, I understand, increase his salary by over $100 per year, some would s.ay at least $150.
If a single man he will receive $1,322 salary and bonus plus the same allowance in respect of clothing, boots and transportation.
If the letter carrier has been in receipt of the maximum under the old classification for five years, and is the head of a household, his salary will be $1,656, plus allowance for clothing, boots and transportation, which considering such allowances would make his pay over 80 cents per hour's work If a single man, $1,422 plus allowance for clothing, boots and transportation.
If under the new classification he was at the minimum of his class on the first of April, 1919, and if he is the head of a household, he will receive $1,320 in salary and bonus plus allowance for clothing, boots and transportation. If a single man he will get $1,152 plus allowance for clothing, boots and transportation. These letter carriers, have (1) a forty-four-hour week (2) permanency of employment; (3) sick leave with pay and (4) three weeks holidays each year without loss of pay.


Jacques Bureau: May I ask the hon. the
President of the Privy Council if this is merely giving an answer to the question asked by the hon. member for South Toronto (Mr. Sheard)?


Newton Wesley Rowell: It is and my hon. friend will see the relevancy of it in a minute.


Jacques Bureau: Have we to wait as long as this to see the relevancy of it?


Edgar Nelson Rhodes: I should point out to the House that when a question is submitted to the Government the practice has always been that the Government should have latitude in giving a reply.
Mr. LAPOINTE,: In this case it is longitude.


Edgar Nelson Rhodes: I must say that the
character of the reply that is being made by the President of the Privy Council is in the nature of making out a case and it is questionable whether, if that practice were carried out to any wide extent, we would be able to proceed with the business of the House expeditiously so much time would be taken up with the answers of ministers o'f the Crown. But I do not feel that I would be justified in curbing the minister in making his reply in view of the practice already alluded to.


Mr. FIELDING:: Has the hon. gentleman permission to occupy so much of the time of the House at this stage?


Newton Wesley Rowell: Without having the particulars before it the House would not be able to appreciate the statement of the policy of the Government. I will conclude by stating the policy of thg Government in reference to the matter.


William Stevens Fielding: The Government's
policy can be declared in some other form than in reply to a question on the Orders of the Day.


Newton Wesley Rowell: This is a statement of
what the Government intends to do in connection with the proposed strike. The conclusion of the Government based upon reports from the Civil Service Commission and the Labour Department is that, having regard to the character of the work and the conditions of employment, the letter carriers are paid at a higher rate than any others doing a similar character of work under similar conditions in this country and if, in view of this fact, the letter carriers go on strike, their action will be treated as resignation of their positions, their places will be filled, and they will not be reinstated.


Some hon. MEMBERS:: Hear, hear.



THE FRENCH TREATY.

[Stage Direction]
On the Orders of the Day:
Hon. RODOLPHE LEMIEUX (Maison-neuve):: I would like to ask the right hon. the Minister of Trade and Commerce (Sir George Foster) if he is aware that the French Treaty is practically denounced and will terminate the 16th o,f this mon(h. Is he aware that the French Government is ready to extend the provisions of the Treaty until the revision of the tariff has taken place?
Rt, Hon. SIR GEORGE FOSTER (Minister of Trade and Commerce): I am aware that notice has been given for the termination of the Treaty. The term of this notice [DOT]expires on the 19th of this month, and the Treaty provisions will then become null and void.


An hon. MEMBER:: By whom was the notice given?


Sir GEORGE FOSTER:: Given by the Canadian Government in respect of the three months' notice. The House should know

that the French Government gave notice of the denunciation of the Treaty itself some fifteen months ago. After that an arrangement was made at the instance of the Canadian Government by which the Treaty should go on temporarily subject to three months' notice by either party to the arrangement. In view of the possible denunciation of the Treaty on three months' notice, it was not possible to carry on business because more time is required in the usual making of contracts and arrangements for the interchange of produce between the two countries. In view of the contemplated tariff legislation of this Parliament the Canadian Government decided to give notice of termination which, as I have said, will expire on the 19th of this month. The French Government has been informed that the Canadian Government is ready to take up negotiations at any time circumstances are opportune therefor.



IMMIGRATION ACT AMENDMENT-REJECTION OF BILL BY SENATE.

[Stage Direction]
On the Orders of the Day:
Ernest Lapointe: May I ask whether it is the intention of the Government 'to introduce legislation in this House for the purpose of repealing the most drastic amendments to the Immigration Act which were made last session during the time of the Winnipeg strike?


Robert Laird Borden: My hon. friend knows that a Bill was introduced into the Senate which has not met with very good fortune there, I believe. Is that the legislation to which my hon. friend refers?


Ernest Lapointe: Yes.


Robert Laird Borden: I am under the impression that where a Bill has been dealt with in Parliament and disposed of by the determifta'tion of Parliament, it is not competent under the Rules, to raise the question again during the same session.



BOARD OF COMMERCE.

Mr. I. E. PEDLOW (South Renfrew):: I would like to ask the right hon. the Minister of Trade and Commerce (Sir George Foster) a question. I notice the report laid on the table of the House by the Board of Commerce is in some respects a fifty-fifty report, rather a majority and a minority report. One section of the report suggests the advisability of placing in the report the correspondence that ensued between the chairman of the commission and the Min-

ister of Trade and Commerce. That has not been included in the report. I want to ask the minister if he has, in view of the report laid on the table of the House, decided to place that correspondence before the House. I would like to ask also if it is the inten-tention of the Government, in view of the ultimatum delivered by one of the commissioners, to allow the Board of Commerce to cease functioning from the present time onward.


Robert Laird Borden: In respect 'to the recommendation contained in the report as to legislation dealing with the abolition of control by the Civil Service Commission, there has. not been a sufficient opportunity since the report was received to give full consideration to what is suggested. When a conclusion is reached on this question it will of course be announced. As to the other matter which arose during my absence, my right hon. friend the Minister of Trade and Commerce (Sir George Foster) will reply to the hon. gentleman's question.


Rt. Hon. Sir GEORGE FOSTER:: In so far as the correspondence is concerned, the really important correspondence has been laid on the table of the House. There is other correspondence which is more or less subsidiary-a good deal of it much less subsidiary-which is now under consideration as to what portion of it, if any, will be brought down.



LIST OF GRAND TRUNK SHAREHOLDERS.

[Stage Direction]
On the Orders of the Day:
Joseph Archambault: Might I inquire from the Government if they 'have completely abandoned the idea of laying on the Table the list of the Grand Trunk shareholders so ordered by the House about eight months ago, and promised about eight times since, which order has never been complied with?


Mr. J. D. REID (Minister of Railways):: I have the list of the Canadian shareholders, but the hon. member, I think, wants the list of the shareholders on the other .side. I understand it would take seven or eight months-some months at least-to make the list in accordance with the order of the House, so that it will be a long time before the list will be ready to submit.


Joseph Archambault: If I remember correctly the nature of the order it was for the list of the shareholders on the books

of the company on the 3rd October last. Surely it would not take seven or eight months to copy that list; a typist would copy it within five hours. Eight months have elapsed since this list was ordered.


Edgar Nelson Rhodes: Order. The question of the hon. member is perfectly proper but he may not make an argument now as to why the order ought to be complied with. He can only do that at another stage of the proceedings of the House.


Joseph Archambault: I bow to your ruling, Mr. Speaker, but I am not trying to make an argument, I am simply answering the Minister of Railways.


Edgar Nelson Rhodes: The hon. member is not in order in doing that.



BOARD OF COMMERCE-CORRESPONDENCE.

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On the Orders of the Day:
Mr. R. L. RICHARDSON:: I intended to make somewhat the same sort of interrogation with regard to the Board of Commerce as my hon. friend the member for Renfrew (Mr. Pedlow). I was going to urge the presentation of the correspondence that is being withheld in order to set at rest some very disturbing rumours with regard to the reasons why-	*


Joseph Archambault: Question.


Robert Lorne Richardson: -Judge Robson retired from the board.



CRIMINAL CODE AMENDMENT ACT-THIRD READING.


[Stage Direction]
On motion of the Rt. Hon. C. J. Doherty (Minister of Justice) for the third reading of Bill No. 137, to amend the Criminal Code.
Hon. T. W. CROTHERS (West Elgin):: Before this Bill receives its third reading I would like to- say one or two words respecting it. I was not present last night, or rather early this morning, when the measure was read a second time, and I have a few observations to make with regard to it although I realize that a large number of members-probably the large majority-will not share my views I think that generally speaking gambling in any form is regarded as a serious evil; and I want to protest- though I may have no one to support me- against this Parliament endorsing any form of gambling. I cannot for the life of me understand why gambling a few miles out
from t(he city of Ottawa should be legalized by Parliament and regarded as highly respectable while gambling on Sparks street is pronounced illegal and disreputable.


Mr. J. H. BURNHAM:: Will the hon. member please define gambling?


Thomas Wilson Crothers: Oh, it is not necessary to define gambling. My hon. friend knows what gambling is.


Jacques Bureau: That is a bad insinuation.


Thomas Wilson Crothers: Everybody knows that the provisions of this Bill, No. 137, recognize and endorse a form of gambling. I am not objecting to individuals, if they so desire, indulging in betting-it would be impracticable to attempt to stop it, and I would not make any such attempt. I do not claim to be specially qualified to advocate "uplifting." But I understand that every State in the United States has made this species of gambling illegal, with the exception of two-Kentucky and one other. Michigan has prohibited it entirely; and those who desire to take part in this form of gambling instead of doing so in that State cross from Detroit to Windsor and give us the benefit of their presence there during a race meet. I simply want to protest against this Parliament recognizing and endorsing what is admitted by everybody to be a great evil. The only reason I have ever heard advanced why it should be encouraged is for the production of thorough-[DOT] bred horses in Canada.


Jacques Bureau: Hear, hear, that is all
right.


Thomas Wilson Crothers: Well, I have read the opinions of men who are experts in that line who deny that there is anything in this contention whatever. How is it that draft horses are produced in this country at a profit? Because there is a demand for them. And if there he any demand for roadsters in this country, breeders of thoroughbreds will find a market just as do the breeders of draft horses. I merely want to express my protest against this Parliament endorsing, recognizing, and legalizing this special form of gambling.
Mr. A. R. iMcMAiSTEiR (Brome): I would not like the member who has just taken his seat to feel that in the views which he has expressed he is alone in this House. I believe in fair play to all.


Ernest Lapointe: Freedom.


Andrew Ross McMaster: Occasionally when 1
have been in the police court-


Some hon. MEMBERS:: Oh, oh.


Andrew Ross McMaster: -in a professional capacity, which, Mr. Speaker, has not been very often, I have seen a large number of very hard looking Orientals brought before the court because they have played fan-tan.


An hon. MEMBER:: What is that?


Andrew Ross McMaster: Fan-tan is a game of chance, I understand. I am not an adept in it myself but it is a gambling game.


Jacques Bureau: What about auction whist?


An hon. MEMBER:: How does it work?


Andrew Ross McMaster: I cannot explain that myself, because I am not conversant with the details of the game; I will leave it to other members to fill in the details. I do not wish to detain the House unduly but I would say this:	For Parliament to enact legislation
which means that when certain classes of the community gamble they are drawn be-for.the court and fined while other members of the community may enjoy the benefits of fresh air and of gambling at the same time, is not British, is not Canadian, is not fair, and it should not be done.
Now, is it correct that the breeding of fine horses is only possible in conjunction with gambling? I have always understood that the stock-raising business was a respectable one-I believe there are members of this House who agree thoroughly with me in that, and I do not think the success of that business depends on gambling. If horseracing requires to have gambling as a concomitant we should be able to get on without it. But I do not say that because you eliminate gambling you of necessity do away with horse racing. There are some other people in Canada who are prepared to race their horses for the fun of the thing.


Mr. WHITE (Victoria):: Did you ever own a race-horse?


Andrew Ross McMaster: I never owned a racehorse, and judging by the class of people whom I see coming from Tace meetings, I have no desire to own race-horses, nor to associate with those people.


Some hon. MEMBERS:: Oh, oh.


Andrew Ross McMaster: My hon. friends say "Oh, oh." Do they imply by that tone of voice that they agree with me? I say that race tracks usually draw the riff-raff and undesirable element of our own population and of outsiders. '


Mr. BALLANTYNE:: Not at all.


Andrew Ross McMaster: Horse race tracks are also frequented by a very desirable class of people no doubt. I conclude my remarks by saying that to make a criminal offence of certain types of gambling, and to recognize other types of gambling, is not fair and such 'discrimination should not be continued. I wish to raise my feeble voice in support of the words uttered by the hon. member for Elgin (Mr. Crothers).


Joseph Archambault: Is my hon. friend of the opinion that speculation on margin on the stock exchange is gambling?


Andrew Ross McMaster: Yes, decidedly so, and a very evil form of gambling. In fact, in such gambling you do not have the benefit of the fresh air and the pleasure of seeing the horses run, and as a rule you lose your money in larger sums and with greater certainty.


Air. CLARK (Red Deer):: When I opened my morning paper to-day I noticed with great pleasure that the right hon. the Prime Alinister, when receiving a certain deputation yesterday, said that the Government had gone as far as they could along these lines. While I endorse the remarks of my two hon. (friends in regard to discrimination, I cannot do so from the .lofty moral altitude which they seem to occupy. Looking at this matter philosophically, I doubt (very much, whether it is possible to describe in such drastic terms an evil which is so widespread in human nature. A boy the moment he can own a marble risks it [DOT]against another boy's marble, and he is a gambler to that extent. If he is a better shot, he wins a marble from the other boy. There is a certain element of skill in the contest but no general good accrues to the community. I am told that the society ladies of this capital and of London play a game called auction bridge for high stakes, d never was present on such occasions and do not know anything about it from personal knowledge, any more than I know anything of the game, but I am told such things go on. Perhaps there are some hon. members here who can either contradict or *confirm this information. The other day on Epsom Downs-where I am sorry to say I have been-
Some hon. MEA1BERS: Oh, oh.


Michael Clark: I am glad to say I have been-


Some hon. MEMBERS:: Hear, hear.


Michael Clark: His Alajesty the King accompanied by the Queen and



192Q '

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fifty or sixty others went to see the Derby, and I have no doubt, if I were in His Majesty's secrets, that he had a little flutter on the race. But, Sir, I come nearer home. I have not the least doubt that many of the elders who waited upon the Prime Minister yesterday are interested in real estate. I know that in the little town nearest my farm all the leading men in the churches are real estate agents, and I have been long enough in Canada to know that *something a good deal like gambling goes on in real estate offices. Then there are places called "stock exchanges" and "wheat pits,"-gambling goes on there too.
Now, from the moral point of view I want to say to my hon. friend from Brome (Mr. McMaster) that the people who make money in any of these spheres of activity might just as reasonably be described as "riffraff" as the somewhat tough but nevertheless very often human beings who frequent race tracks; and with due deference to our common human nature-which in the case of any individual among us has its faults, *however well wre may succeed in hiding them-I think it would be well for us not to use such strong language, and to take the method of the Creator by going slowly in our attempts to improve human beings according to our narrow outlook. After all *the world is inhabited by a large number of different people. I am not now playing *the role of a preacher,-
Ernest Lapointe: Quite the opposite.


Michael Clark: I am as a legislator talking of what it is possible for Governments and Parliaments to do; and the distinction between Governments and Parliaments and preachers is, that while preachers have the high and unapproachable role of improving human beings according to their highest ideals which is their undoubted province and duty, Governments and Parliaments have to do with all classes and conditions of men, and have to harmonize one portion of society with the other. They have perhaps the much more difficult task, and therefore they ought to go cautiously in the methods they pursue for the improvement of society. That is my view upon this question. I rose, however, merely for the purpose of endorsing what I think is the sound view, that we should not discriminate. I do not know that it will impress my hon. friend the Minister of Justice (Mr. Doherty), but I am sure he would shrink at the idea of having to regulate rich companies or rich individuals, or even boys playing marbles, although he is found in
the apparently congenial sphere of activity of curbing the old-fashioned sport of horseracing. I think it wmuld be just as well to leave that sport alone.


Mr. NICHOLSON (Algoma):: 
Mr. McGIBBON (Muskoka):: I would like to endorse the sentiments of the hon. member for Red Deer (Mr. Clark). On many occasions I have in this House opposed restricting the liberties and the privileges oi the people, and I was glad to read in thi: morning's paper that the Prime Minister had had the courage to tell a deputation which waited upon him yesterday that he and his Government were not going to pass any further legislation restricting race track betting. I think our people in all classes of society are quite capable of looking after their own morals. Whether you describe them as high or low, or in the words of the hon. member for Brome describe them as "the riff-raff of the country" - which expression I do not agree with-I think they are entitled to exercise their liberties as British subjects in this country-


Some hon. MEMBERS:: Canadians.
Mr. McGIBBON (Muskoka)-and they are entitled to spend their money in the way that gives them most pleasure. I am opposed to any further restrictions being placed upon the people of this country.


Jacques Bureau: Hear, hear.


Peter McGibbon: I think they are intelligent enough and honest enough

to conduct themselves as good free British citizens. If they do that, I think this House and the country should not ask anything further.


Mr. EDMOND PROULX (Prescott):: Mr. Speaker, Parliament settled about twelve years ago that race track gambling should not be done away with in this country. For some years afterwards there was quite an abuse of gambling at certain race tracks in this country, especially in the province of Ontario. -Several of the states on the other side of the line prohibited gambling at race tracks, and in consequence these American race track operators came over to Canada and established race tracks at Fort Erie, Windsor, and other places. These were not genuine race tracks, but simply tracks for making money for the operators. I believe this legislation will have the effect of curbing this evil, and will tend to make racing a legitimate sport instead of a mere money-making venture. I fully endorse the principle of this Bill. If you are not going to have pari-mutuels, but are going to allow people full liberty to Ibet, the gambling evil will continue and increase, because so long as New York, Michigan, and other states prohibit race track gambling, the gamblers from the United States will come over to Canada. I think the House should adopt this Bill. The consensus of opinion in this country seem-s to be against doing away with racing altogether. Horse breeders maintain that it is necessary for the -breeding of thoroughbred horses. I do not know whether they are right or not. That was a much-disputed point when the question was .raised in this House twelve years ago. I think my hon. friend from South Ontario (Mr. Smith) would be in favour of racing, and would be of opinion that it improves the -breed of horses. He knows more about it than I do; I am not a horse breeder myself. I condemn the race track gambling evil, and I will do whatever is in my power to curb it, and as I think this Bill will have the effect of curbing it, I shall support it.


Mr. F. S. SCOTT (South Waterloo):: Mr. Speaker, I think this is a move in the right direction. The hon. member for West Elgin (Mr. Crothers) has stated that in the United States the great majority of the states have prohibited race track gambling, and I believe that statement is correct. Nevertheless, it is a fact that gambling at race tracks goes on to a very large extent in practically all the states of the Union. The fact is that gambling at race tracks in the United States is tolerated. An effort

is made by this legislation to bring race track gambling under some sort of control, and from what we -have seen in the United States I -believe that is a -move in the right direction. It is perfectly true that gambling at race tracks in the state of Michigan, for instance, has been stopped, but, nevertheless it is a fact that gambling at race tracks in that state is carried on week after week, and it seems to me that legislation along the lines proposed by this Bill is what we need in this Dominion in order to put the bu-siness on a proper basis.
While I do not bet at races myself, I confess that there is no sport I enjoy so thoroughly as a Tace meet, both running and trotting meets. I think it is the finest sport in the world, and should be encouraged in every country. I cannot agree with some speakers that it is a sin or something very wrong to place a bet on a horse race.


Jacques Bureau: A virtuous sin.


Frank Stewart Scott: An owner who enters his horse for a race pays his entry fee, say five per cent. If he wins the purse, he receives fifty per cent of the purse money. In other words, he bets one to ten that his horse is -going to win. Now it is a well-known fact that the men who engage in horse racing, even if they are rich, cannot maintain -stables on the purses that are given, and I cannot see anything wrong in the owner placing an additional bet through the machines or the bookmakers and in that way increasing his winnings. I should like to emphasize that point. I do not see any difference between a man paying an entry fee to win a -purse and- the man who places a -bet on an entry which he may have. The great criticism that has been made of this sport is due to the abuses that have crept into the conducting of it, and I think that to regulate this -sport, as this legislation proposes to regulate -it, is a step in the right direction. It may be that the percentages that have been struck are not quite right, but after we have had experience of them we can govern ourselves accordingly. I cannot but believe that if in this country, just as in Great Britain, we have horse racing cleanly conducted, it will work to the advantage and betterment of our people. I am strongly of the opinion that this legislation is -a move in the right direction.


Mr. J. W. EDWARDS (Frontenac):: 
Jacques Bureau: Mr. Speaker, the hon.
member for Frontenac (Mr. Edwards) prefaced his remarks by saying that he had no use for men who remarked that we were putting too^ many restrictions on people through legislation, etc. If we were to have .in Canada or anywhere else only those things and those men for Whom my hon. friend has any use, there would be ample room for them to move around, because there would be practically no one left. From



his remarks, he has apparently use for very few things, and I cannot agree with him as regards those things for which he has use.
Be that as it may, there are two classes of men in this country. First, there are men who love sport, who want their liberty and to be able to use their time three days a week or, to use the words of my hon. friend, to spend their time as they see fit for a week or two weeks. I do not see why we should put any limitations on the way a man may spend his time if he does not spend it in committting crimes, illegalities or nuisances. Who is going to prevent me from going to a club in the Laurentian mountains and sitting there-although the apparent purpose is fishing-and smoking for two or three weeks if I choose to do so, as I would be doing a perfectly legitimate thing?


Edmond Proulx: The hon. member would
not be doing any good for the country.


Jacques Bureau: I might be doing just as much good as the hon. member for Prescott, if he was sitting here going full speed.


Mr.   BBLAND@: I think my hon. friend
would be doing a good thing for the country by taking a rest, because then he would be fresher for next session.


Jacques Bureau: The newspapers have
made an announcement that compels me to disclaim any freshness in any way you may interpret the meaning of that word. There are people who live in this country who claim the right to enjoy liberties as long as the^ are not committing crimes, nuisances or illegalities. Then there are others who think, by preventing men from following their inclinations and tastes, they are doing good for the country. I say: ' No. The hon. member for Frontenac (Mr. Edwards) says that he enjoys a race. Very few men do not enjoy a race, but how are you going to have a race if you do not have some inducement to people to breed horses and bring them there? The hon. member for Brome (Mr. McMaster), following the argument oif the hon. member for Frontenac, says that he does not believe in racing as ian inducement to improve the breed of horses. It is the only inducement. Why do we have exhibitions, or fairs, as we call them, in every county. To get all the breeders together. Those' breeders compare notes and endeavour to improve the breed. Those fairs, bring around people who play with three shells-I do not know what the game 
is- the same as people do on race tracks. Nevertheless, you see at these fairs the best men from the farming communities.


Andrew Ross McMaster: Not "rigging the
thimble."


Jacques Bureau: People get into a corner and "run the thimble" or the roulette wheel. A fair is a place where everybody in the community will go in order to get some fresh air, and at the same time to educate themselves and, perhaps, have a little fun. They are entitled to that. If I were to take any exception to this law,
I would say that it is too restrictive, and I am not ashamed to say that. At race tracks you meet as good people as you will come across, perhaps not in the police court, but in the Superior Court or in the court of King's Bench. I have never degraded nor contaminated myself by attending a good horse race; and if I lost a little money befoie I went home, I did not worry over that and I do not think anybody suffered on account of it. As regards the man who cannnot afford to bet, who is scandalised at the idea of going to a Tace track, let him stay at home. That is an easy way for him to get out of the difficulty, but why should he deprive his neighbour from a sport which I consider is just as legitimate as boxing, golfing, hockey, baseball or lacrosse?


Andrew Ross McMaster: It is cruelty to animals.


Jacques Bureau: Those animals are
trained to endure things that other horses are not trained to do. I may be told that it is cruelty to a man to have him box two or three rounds. I contend that that makes him more limber; it makes him a better man, a better citizen. There is an old latin saying: "Mens Sana in corpore sano"
[DOT]-"A sound mind in a sound body." These sports contribute towards making sound bodies and sound minds. That is my view on the question.	,


Mr. LEVI THOMSON (Qu'Appelle):: Mr. Speaker, I think it requires only a short time to express one's opinion on this subject. I do not purpose fallowing the discussion which, it seems to me, has in many cases been very wide of the mark. The question is this-are we to decide that a certain thing at one time and under certain circumstances is illegal and an exactly similar thing under other circumstances is all right. I am not going to discuss the question of restriction further than to re-

peat what the hon. member for Frontenac
(Mr. Edwards) said, namely, 3 p.m. that all laws are restrictions.
That does not mean that you have to restrict a man wherever he goes, or that all restrictions are good or all bad. You must use discrimination in the restrictions you put upon people. I fail to see how we can consistently say that certain things are legal and should not be punished by fine or imprisonment if they are done in a certain place but must be punished if done in another place; that it is wrong and sinful, and therefore must be punished by fine or imprisonment for people to put up stakes in a contest of skill and endurance of persons, but that when it comes to a question of skill and endurance of animals, that is perfectly legal. Let us be consistent ; let us either allow the holding of stakes and depositing of money in all cases of this kind, or make it illegal in all cases. We are as inconsistent as it is possible for any people to be if we are to allow this in certain things and not in others.
I have not heard any good argument raised in support of the contention that gambling, if you like to use that term, or the holding of bets, which is practically what we are aiming a,t here, is necessary at race tracks in order to encourage the breeding df horses. We are told by one gentleman that it is necessary to allow the owners and breeders of horses to bet on a horse race in order that they may make some money. Does the man who Ibets on a horse race always win?
No less an authority than Sir John A. Macdonald said that there was nothing more uncertain than horse-racing and elections. This question of betting, Mr. Chairman, is exceedingly uncertain and a man who engages in it is as likely to lose as to gain. The chances are ten to one that he will lose more than he gains; and I do not see how are you going to encourage horse-racing and the breeding of horses by this measure. It seems to me that if there is any profit in this business it should be put in the way of those who breed horses. They should hold the stakes. If we are going to pass this legislation, let us be reasonable and confine the holding of stakes to the men who are breeding horses. If you.do that you will encourage horse-breeding, but not otherwise. As it is, you leave matters so that the man who is betting is on the average behind, because he must pay his percentage besides taking his chance of losing. I do not think that we can hope to promote the breeding of horses by this means. We should try to 218*
be reasonable, and this is certainly not reasonable. This Bill provides that where any person or association becomes a custodian or depository of the stakes the percentage deducted from the total amount deposited shall not exceed certain sums. Where the total amount deposited on a race is $20,000, the percentage is 7 per cent, which means $1,400, and a man is going to be the loser if he is to pay 7 per cent of the money invested. I do not think this will operate to the advantage of horse-breeders.
Rt, Hon. Sir ROBERT BORDEN:	This
subject has been before Parliament on many occasions within my experience, and I recall particularly a very considerable debate, after inquiry by a committee of the House, which resulted in what was known as the Miller Bill. I remember on the occasion of that discussion that my hon. friend from Jacques Cartier (Mr. Lafortune) made a very interesting and witty speech. Some hon. gentlemen who have spoken in this debate seem to have an entire misapprehension as to the object and purpose of this legislation. It does not recognize anything that has not been recognized for many years. The law upon the statute book as it is at present recognizes the very thing which is supposed to be recognized for the first time by this legislation. It has been on the statute and has been acted upon for fifteen or twenty years at least. Therefore when any hon. gentleman suggests that Parliament is asked to recognize something that was unlawful before, either he has not given due consideration to the subject, or he has not clearly expressed himself; because any such statement is absolutely contrary to the fact. The Government recognized, as was recognized everywhere, that there were some evils which ought to be remedied and which it might be practicable to remedy in respect of betting upon race tracks. We realized that at certain points in Canada near the frontier race meetings had been held too frequently and that large amounts of money had probably been taken out of the country. Further than that, there has been an allegation, whether true or false I do not know, that the betting at some of these places was carried on under not absolutely fair conditions. The Government did take into consideration on the one hand the necessity of restricting that evil as far as possible, and, on the other hand, of presenting to Parliament legislation that would command the assent of both Houses. I suppose that every hon. gentleman in this House will agree that it would be of very

little use for us to bring down to this House a measure that would not probably command the assent of both Houses. If it was undesirable to leave the law as it stood before, without any restriction whatever calculated to diminish the evils to which 1 have alluded, ordinary common sense would indicate that the Government would have to take into consideration first the character of the existing evils, and then the possibility of cutting them down to a minimum by legislation that would command the assent of both Houses of Parliament. At least, that is the way it struck us, whether our impression with regard to the matter was right or wrong. And what we determined to do was to impose such further restrictions upon the law already existing as would prevent unscrupulous people from coming in from abroad and engaging in this country in the practices I have mentioned. It was stated that vultures came into this country and robbed the young men of their money. Well then, the purpose of the .Minister of Jus-tic in preparing legislation was so to frame it that the evil-doers could not seize their prey, so to legislate that it would not be a paying proposition for them to conduct these meetings as they have been conducted in the past. That was the purpose and object of the legislation, and no other. It is restrictive and not enabling. It was designed by the Government from the standpoint I have already mentioned, and with the sincere desire to minimize as far as possible by legislation the serious evils to which allusion has been made. No one denies that these evils have to some extent existed. For my part, 1 share the view entertained by my colleague, the Minister of Justice, who has prepared this legislation, that it will do much to remove those evils. You cannot eradicate from human nature a certain innate desire to bet now and then and to indulge in games of chance. This desire exists in every civilized nation, and, for that matter, among uncivilized people too; and I would not be quite sure that some of the gentlemen who have spoken so eloquently this afternoon have not occasionally made a bet upon the result of an election. Well, other people desire sometimes to bet upon a horse-race, and as my hon. friend who has just spoken (Mr. Thomson) has stated, a very eminent authority laid down the dogma in days gone by, that the result is about as uncertain in the case of an election as in the case of a horse-race. I hope that what I have said, and I have endeavoured to put the matter as plainly as I can, will indicate to the House that the purpose 
which animated the Government in the legislation was entirely in the line of minimizing as far as possible an evil that was recognized and to do so by means that would be fairly certain of attaining success.
Motion agreed to and Bill read the third time.



SPECIAL WAR REVENUE ACT, 1915, AMENDMENT.


[Stage Direction]
On motion of Sir Henry Drayton the House went into Committee of Ways and Means (from June 9) to consider the proposed resolution precedent to the amendment of the Special War Revenue Act, 1915, Mr. Boivin in the Chair.
The CHAIRMAN:: When the House was last in Committee of Ways and Means, this resolution had been discussed and the Minister of Finance had given notice of certain amendments which it was proposed to move at a later stage. Shall the resolution carry?


Sir HENRY DRAYTON (Minister of Finance) :: We have already had a pretty fair and full discussion of the principles of the resolution. What I would now suggest is that the resolution be taken up item by item and the items discussed separately.
Resolved, That it is expedient to amend The Special War Revenue Act, 1916, and to provide :-[DOT]
. 1. That the following excise taxes be imposed, levied and collected on the total purchase price of the articles hereinafter specified, and on articles of clothing the said tax may be imposed upon the combined selling price of materials and cost of manufacture when sold separately:

(a) A tax of ten per cent on,-
Boots, shoes, pumps and slippers of any material (not including shoes or appliances made to order for persons having a crippled or deformed foot or ankle) in excess of $9.00 per pair ;


Jacques Bureau: I think there was an amendment as to the price.


Michael Clark: Before we proceed with the items in detail, I rise with a great sense of responsibility to ask your leave, Mr. Chairman, to make one o,r two general observations. Speaking in the presence at least of one member of this House of unrivalled experience in the matter of budgets and questions of this kind, the hon. member for Shelburne and Queen's (Mr. Fielding), I would submit to the members o.f this committee through you, Sir, that we find ourselves at this moment in a situation almost unprecedented in any British country in regard to budgets.

What is the ordinary procedure in regard to a budget? I claim, in view of the changes, in view of the tremendous alterations that are involved in the resolution, although I shall not trespass at any great length, a little latitude. The method of procedure in regard to the introduction of a budget which, in so far as I know, has been universally followed in all civilized countries, certainly in all British countries, has been that the Government brings down its budget proposals after the most careful consideration not only of the principles of the budget but o.f the machinery by which these principles are to be given effect to. The facts in regard to the principles, the details and any change in the machinery, are kept absolutely secret until the Budget is laid before Parliament. After they bring these proposals down in that way, the raising of the finances for the running of the country is so vitally important a matter that the government almost uniformly,-I will say uniformly-have taken the position : "Those are our proposals arrived at under the greatest sense of responsibility lo raise the finances for the running of the country and by those proposals substantially we stand or fall." I appeal to you, Sir, if that has not been the universal procedure in regard to the Budget.
Why has it been so? What is the reason for it? The reason is this: The secrets are kept and the Government stands or falls by its proposals because it is of vital necessity that the moment the Budget proposals are known the machinery of the Finance Department should be ready to apply them on the one hand and the business of the country should not be nearly upset on the other. That seems to me to be elementary financial history in all British countries. What have we here? I venture to think

the newspapers take this view-that we have had practically a second Budget introduced in the committee stage of these proposals. It is not an alteration in detail; it is an alteration in principle.. We have changed on a number of articles from the method of collecting the percentage on the whole price of the article to the American plan of only collecting the percentage on the excess, making an enormous difference in the amount we shall collect on any given article, this being tantamount to a change in the principles of the Budget. This is a very serious state of affairs, and I am bound to say that from my reading of the financial history of the Old Country such a state of affairs would, under ordinary circumstances, require a very drastic remedy
and would certainly call, not only for the resignation of the minister who was particularly involved, but for the resignation of the administration as well. I asked the other night what the machinery was for the collection of this tax and my hon. friend the Minister of Finance did not have any answer. He said that he might employ stamps, oblivious apparently of the precedent that is absolute that some of these taxes .were already being paid and were being collected in the imost slipshod and unprepared manner apparently because the hon. gentleman could give no description of the machinery by which he proposes to collect these taxes. The Government have been unduly firm concerning the title of their taxes under which their administration would have a second argument for interfering with the business of the country but they have been irresolute and vacillating,-and they have been attacked by the press-in regard to the vital principles of their Budget. I am very sure the minister will agree with me when I say that I have no desire on . personal grounds to see his resignation but I think the committee is entitled to full information and at once-and not only the committee but the country-first as to whether these taxes are to be immediately collected or not, because I want to tell my hon. friend the minister that from correspondence which I have had-and I have no doubt every member of this House has had-in remote districts and in near districts of the country some retail merchants are collecting the taxes-others are not. There is a beautiful state of affairs as a result of the Budget: Slipshod, haphazard, no directions. In some cases, I repeat, to my knowledge, the taxes are being collected, in some they are not; and other people are at a loss and are writing for information as to what they have got to do. The ordinary procedure in regard to Budgets is departed from just one hundred per cent in this-that absolute confusion is to be introduced into the business of the country, and the gathering of the so-called excise taxes is being carried on haphazard. .Now, we are entitled at once to information from the minister upon two points. There is this important matter, that a great deal of money has already been collected under the provisions as they were originally introduced, but those provisions are being reversed by the hon. minister himself. What is to become of the money that- has already been collected? The people have paid it; they have paid it under a law from which

the author of the law is receding. What is to come of that matter? This is a very important matter for the people that have .paid the taxes. It is a very important inat-ter for the merchants that have collected the taxes. My hon. friend will not disagree with me on terminology in this case when I say that it is a case of absolutely utter confusion and chaos.
Now, wihat the people of this country, from Halifax to Vancouver, want to know is: Are the Ministry now .so prepared to stand or fall by their .proposals that they .are prepared to give them .information as to how these taxes are to be collected, how they are to he taken care of, and what the machinery is to be; and I have no doubt that very important discussions will yet arise on that very .question of machinery. I wonder if my hon. friend has noticed-he must have noticed it, probably it has 'been brought to his close notice-that in the papers last night it was stated that the retailers of this country say that if these taxes were all collected at headquarters only nine thousand firms would be concerned. They say that collecting them in the way of sales taxes-as they ought to be called, I stick to my point-250,000 firms will -be concerned. That is the statement of the retail traders. I need scarcely point out to the committee that that statement, if it has a grain of truth in it, has a bearing of the utmost importance on the machinery that is to he used, the expense of collection, the usefulness of the taxes, and the amount of money that will be raised by it. I submit these elementary considerations; but the point I do want to impress upon the minister is that he must now have arrived at the point-which is the usual procedure, I repeat, in Budget matters-that he and the Government of which he is a member will stand or fall by their proposals, and they will give the people of this country, and the Parliament of this country, absolutely reliable and detailed information as to the machinery by which the taxes are to be put in operation.


John Wesley Edwards: Those of us who had1 the privilege of listening to the hon. member for Red. Deer when these resolutions were first brought down, and having regard to the attitude which he assumed on that occasion, will not, I think, be disposed to take too seriously his representations now. A Budget has been brought down and certain resolutions have been placed before the committee in the ordinary course, as has been done on former occasions. On former occasions there might he an item in the Budget proposing to make a reduction, we

will say, of 2h per cent on implements or on something else. Until that finally passed the committee it was liable to be changed by the committee, and might be changed at any time, just as any item in the present Budget might be changed. We are simply following the procedure which has been followed in the past. No person in this House-at least no person on this side-will expect the hon. member for Red Deer to be satisfied no matter what is done. The day for the hon. member to experience satisfaction at what the Government does has long since passed. There was a time in his existence, since he entered Parliament, when he was ready to accept anything. Though he preached free trade from the housetops he was prepared to accept and did accept, a Budget brought down by the Minister of Finance.


Michael Clark: I rise to a point of order. We are now discussing the Budget resolutions, and I submit to you, Sir, that discussion of my views upon free trade, and of my history in regard to free trade is not apposite to the .question under consideration.


Georges Henri Boivin: I would ask the hon. member for Frontenac if he has anything to say on the point of order before I give my ruling.
Mr. E1DWARDS:	No, Mr. Chairman, I
have nothing to say.


Georges Henri Boivin: I must therefore rule that the point of order raised by the hon. member for Red Deer is well taken.


John Wesley Edwards: That, Mr. Chairman,
is a ruling which I expected that you would give, and it is one with which I entirely agree.


Some hon. MEMBERS:: Hear, hear.


John Wesley Edwards: I might say, Mr. Chairman, but of course it is really unnecessary to do so, that while the hon. member for Red Deer is very free on certain occasions with his .fulsome flattery and with his criticisms, on other occasions he is extremely sensitive to a little bit of criticism when it refers to himself. When the hon. member was endeavouring to justify the position he took at the time of his exception to the use of the word "excise," he told us and grew wonderfully eloquent-or rather somewhat boisterous-in his language that great violence had been done to the English language by the misuse of the word. I contend that the word "excise" as applied to these duties is correctly applied. These

duties are collected, in the main, on things produced and sold in Canada. I might- it will only take a moment, notwithstanding the wonderful knowledge possessed by the hon. member for Red Deer I think there is still room for him to gain a litttle information-I might just quote an authority which I do not think even he will question, even no less an authority than Adam Smith, in regard to this. Now Adam Smith says:	_
"The duties of excise are imposed chiefly upon goods of home produce destined for home consumption."
If Adam Smith had intended that the application of the words should exclusively be to goods produced in the country where they were consumed he would have left the word "chiefly" out. The use of that word by Adam Smith must mean, and can only mean, that the word "excise" while it applies generally to goods made and consumed in the country applies also to like things when imported and consumed in the country. That is an authority which I presume the hon. member for Red Deer will be disposed to accept. He will hardly charge Adam Smith with doing violence to the English language.


Michael Clark: He lived a
century and a half ago.


John Wesley Edwards: Yes, that is very true. The hon. member says that Adam Smith lived a century and a half ago, but that has not prevented my hon. friend from quoting Adam Smith, as an authority, on many occasions in this House. Indeed he has not been limited by a century and a half in making his quotations; he has gone into the dim and misty ages, hundreds and hundreds of years ago, when he could quote some person-mow long since dead and gone-who had at some time in his life made use of expressions which suited the views of the hon. gentleman. In regard to this particular matter, which my hon. friend thought of sufficient importance to make the subject of an amendment to the Budget, he tells us that Adam Smith lived a century and a half ago and therefore I should not quote him as an authority. The hon. gentleman has been in this House loir twelve years, and this is the first time that he has taken occasion to move an amendment to the Budget.
Now, Sir, what has been the attitude of the hon. gentleman (Mr. M. Clark) in regard to this Budget? The Minister of Finance (Sir Henry Drayton) told hon. members with the utmost candour that he was facing a serious after-the-war situation which required the raising of large sums of money. He gave us full details of the situation, and he invited hon. gentlemen on the other side of the House as well as hon. gentlemen on this side to come forward with helpful suggestions towards meeting this national difficulty. Some hon. gentlemen sitting opposite responded to that appeal. But what has been the attitude of the hon. member for Red Deer (Mr. M. Clark)? He was not following in the footsteps of Cobden and Peel and Bright, nor was he wearing the mantle of Gladstone, when he greeted this Budget with sneers and jibes. That is the way the hon. gentleman from Red Deer met the appeal of the Minister of Finance for the assistance of all hon. members in going over these regulations with a view to amending them so that they would cause the least inconvenience to the public while at the same time providing the much needed revenue.
I have sat in this House for twelve years and have seen Budget after Budget introduced. I have seen those Budgets criticised, sometimes from the standpoint of party advantage-and we must expect a certain amount of such criticism-but never have I seen any Budget received in the manner in which this Budget has been received by the hon. member for Red Deer. What has that hon. gentleman done in the way of suggesting anything helpful? Not one single word. His whole attitude has been one of hostility, of carping criticism, of jeers and sneers and jibes, which ill becomes a gentleman who has posed for years past as a disciple of Pitt and Peel and Gladstone, and of Lord This and the Duke of That in. the Old Land, and who has offered us the benefit of his wide experience and knowledge of political affairs. Not one helpful suggestion has the hon. gentleman made, buTfrom the very beginning he has put himself in an attitude of hostility towards assisting the Minister of Finance in raising the revenue which he is honestly and sincerely desirous of raising to meet the pressing needs of this country.
I have no objection to the hon. gentleman from Red Deer expressing his views in this House. He can scatter all the flattery he likes, and follow it up by the most narrow criticism he is capable of, [DOT] but for my part I care as little for his fulsome flattery as for his blows. I ask no quarter from him; he receives none from me. But I would ask him from the standpoint of a member who has sat in this House for twelve years to throw aside politics for the
34.38

time being, and if he has any helpful criticism, to proffer it instead of offering only jibes and sneers.


Michael Clark: Mr. Chairman, I do not rise to delay the committee by following my hon. friend (Mr. Edwards) in all his very delicate references to myself. I rise for two purposes, and 'two only. My hon. friend has made a direct charge against me in regard to my attitude towards the Minister of Finance. He said that I had met the minister's proposals with nothing but carping citicism. I call my hon. friends attention to the fact that on the proposals for increased income tax I never opened my mouth when the Bill was going through committee, but on the second reading I did take the liberty of saying that I thought the minister might have further increased that tax. I offered no opposition except to taxes which, in the exercise of my undoubted privilege, I have my own views about. After all, I am only a human being, but I am entitled to as much respect even from the hon. member for Frontenac as God Almighty might be expected to give to a black beetle! I submit that to my hon. friend's view. That is my first object in rising.
My second object is to meet my hon. friend's quibble-because I must term it a quibble-in regard to my having quoted Adam Smith with approval on some things while not approving him on this particular thing. As a matter of fact I do approve of Adam Smith's views in this instance. I told my hon. friend and the other hon. members who listened to me on the second reading that these excise duties did exist in England 150 years ago, and I told how they were characterized at that very time by Doctor Johnston. Doctor Johnston and Adam Smith were contemporaries. I carefully guarded myself by saying further that the term "Excise Duty'' had had a precise meaning for a century. My liori. friend's complaint is that I object to taking Adam Smith, who lived 150 years ago, as an authority upon the meaning of the words current in the last 100 years, during the whole of which period he has been dead. That is the point of my hon. friend's argument.	.
I do not follow him further, because I remind myself from time to time that while a medical man in the person of Doctor Harvey discovered the circulation of the blood, n^y hon. friend has for some time held a patent for the circulation of bile.
[Mr. Edwards. 1


John Wesley Edwards: In reference to that last remark, I might say that even Doctor Harvey might have revised his theory in regard to the circulation of the blood if he had examined the anatomy of my hon. friend from Red Deer. If we may judge by his political and tariff views it would puzzle the greatest anatomist on earth to follow the circulation of the hon. gentleman's blood.


Mr. STEVENS (Vancouver Centre):: Mr. Chairman, having due regard to your ruling, and bearing in mind that we are not dealing with physiological questions, or whether some economist 150 years ago said this or that, I wish to address one or two words to the Minister of Finance on a very practical matter. May I preface my remarks by stating to the House at large that these taxes being of an entirely new character, necessarily, I think, demand from the House very careful consideration, and that where, after due thought, it is found desirable they should be modified or changed. With all due deference to my hon. friend from Red Deer, I take the stand that the hon. minister (Sir Henry Drayton) has been exceedingly wise, after hearing the criticisms from hon. gentlemen opposite and from this side of the House, and after receiving suggestions from practical men in various lines of business, to acknowledge the desirability of in some degree modifying these schedules.
I wish to make direct reference to the schedule, and before the minister-if he intends so to do-makes that definite reply so forcibly demanded by the hon. member for Red Deer, I would like the minister to consider the advisability of adding to the amended schedule hats .and caps as coming under the same category as clothing; that is, that this tax shall be levied against the amount in excess of $5, or $2, as the case may be, as against the full amount above those	two sums.
I think I make myself clear in my request to the minister. I shall now give him very briefly one or two reasons for my request.
I would like to point out first that hats can scarcely be considered a luxury until they get into a class where they are of so expensive and odd a character that the average person does not buy them. Now any felt hat under $5 is not an economical hat to buy. I am told by those who know the business thoroughly, and I had occasion some years ago to acquaint myself with this business, that it is impossible to produce under present conditions a felt hat under $5 which will be an economical

purchase, that is to say, which will bear re-shaping and cleaning, which is a very common practice amongst a great many of our citizens. Of course, you can buy a hat cheaper than that, but after a few months it is perfectly useless and cannot be re-shaped or cleaned. Upon that I base my argument that it is not desirable to discourage the purchase of let us say a $6 or $7 hat, which in the long run may be much cheaper. Now I want to make one or two direct references 'as to cost in support of this limit which I have mentioned. Upon investigation I find that the cost of the material entering into the manufacture of felt hats-and this applies also to cloth caps-has gone up anywhere from 200 to 700 per cent. This is something that is not controlled in Canada. It is not a case of some group of persons controlling this raw material and making an abnormal profit on it, because nearly all the raw material entering into the manufacture oi felt hats is imported. The same remark applies very largely to the trimmings of a felt hat. I would bring this very strongly to the attention of the minister and urge him to bring hats and caps within the same list that he has so wisely, I think, provided covering clothing. That is my direct request, and I trust the minister will give it his favourable consideration before making final answer.
Before taking my seat I would say again to the House that I think the minister has been wise in amending the schedules. As the bon. member for Bed Deer has said, we have all been deluged with requests from business people throughout this country. I have in my desk at this present moment perhaps fifty telegrams from very important business concerns in Canada, and after analysing these telegrams and considering them in the light of the amendments suggested by the minister, I find that the requests made by these gentlemen and the reasons, many of them very logical, put forward have been very largely met by the minister. So the House, I think, would be well advised to give the minister very earnest support in his effort to bring this rather difficult undertaking into proper and workable shape, rather than taking the stand, as was suggested, I believe by the hon. member for Red Deer, that the whole proposals should be swept aside and perhaps some new scheme of taxation devised. I submit that the minister has not changed the principle of his Budget, but he has very w'sely conformed to what was clearly
in the public interest in this particular form of taxation.
iMr. EULER: When the minister stated the other day that members on both sides of the House might assist him with suggestions, I had hoped that he referred not only to the various details of the taxes, but also to the method by which they should be collected. I regret very much, however, that he made it somewhat plain the other day that, so far as the method of collection was concerned, he was not disposed to make any change. I realize the difficult position in which the minister is placed in raising the necessary revenue. He has to raise a great deal of money. He is facing an unprecedented situation, and it is quite natural that in the circumstances he must adopt unprecedented, and perhaps more or less experimental means for raising the money which he has to find. He has laid down the principle that the money should largely be paid by those who can best afford to pay it, and that the taxes should be collected with as little inconvenience to the people of Canada as possible. I think it is the general opinion throughout this country that there is a great deal of money in the hands of a few people. Ordinarily we like to speak of these men as profiteers, and the general demand is that the enormous profits of the profiteers be taken from them and put in the coffers of the country. For my part, while I subscribe to that in a general way, I think there is a good deal of nonsense talked about the profiteers. I hold no brief for them at all. As a matter of fact, il believe that a great many people, including members of this House, are not profiteers, perhaps simply because they have not had the opportunity. There are many Pharisees amongst us.
The minister has adopted the plan of raising the necessary revenue largely in the form of luxury taxes and income taxes. In that way he expects to get the money from those who can beet afford to pay. Personally, I do not like very much the term "luxury taxes." I think if the luxury taxes so-called, were really luxury taxes they would very largely overlap the income tax; that is, that the men who pay the income tax would also very largely pay the luxury tax. For my part, I do not believe in calling them luxury taxes. I would call them sales taxes, or excise taxes; it does not make much difference to me which term you choose. While you may get a good deal of money from the wealthy people, I do not believe it will be possible to obtain

all the revenue that is required from that class, and I think that the plain people of this country might just as well face the fact now as later that after all the costs of this war will have to he paid by them and by nobody else, because although the wealthy man may pay in the first instance, ultimately the taxes will be passed on to the great mass of the people. If that be true, that the common people of this country will pay the great mass of the taxes, then I say let us make our method of rising the taxes just as simple and easy as possible, without trying to carry out any impossible or improbable theories. I would urge upon the minister that he do not close his mind altogether as to the best method of collecting these so-called luxury taxes, and that he do not necessarily insist now that these taxes shall be collected through the retailers of this country. I think he should take this very reasonable attitude, that the members of the committee should discuss pro and con the arguments relating to the method of collecting and then he and the Government could decide which arguments have the preponderance of logic behind them, and then let the minister adopt the best method without necessarily laying down in advance any definite rule as to how these taxes shall be collected. I do not think the minister would be stultifying himself by adopting that procedure or be necessarily called upon to resign from office, although personally I would like to see the whole Government resign. In support of my statement that he would not be stultifying himself, I say that the minister has already in effect altered some of the principles which he enunciated the other day. Reference has been made to that by other speakers. For instance, he first stated that the tax upon clothing and other articles was to be collected upon the whole purchase price, if the article exceeded a certain price.
He has now altered that attitude, and quite rightly so, in that he purposes collecting certain taxes only on amounts in excess of a certain figure. But I cannot see why the minister was not consistent in following that principle all the way through. The matter of hats has already been referred to by the hon. member for Vancouver Centre (Mr. Stevens). I have no particular interest in the manufacture nor in the retailing of hats; but if the minister is laying down the principle that articles of clothing shall be taxed only on certain excess values, surely hats and caps come within that category and should be

treated in exactly the same way as any other article of clothing. While food and clothing may be bare necessaries of life, it does not follow that all other things are luxuries and should, therefore, be taxable. "Man," it is said, "does not live by bread alone." Besides the bare necessaries of life such as there are, in our civilization, many things without which we cannot possibly live any sort of complete life. In our houses we need furniture, carpets, rugs, electric fixtures and many other things which may occur to the mind olf any hon. member. These things are absolutely necessary to the comfort and happiness of the Canadian people. While I admit that, after a certain point as regards prices, many of these articles take on the nature of luxuries, I contend that up to the point where they take on that nature, they should not be taxed any more than food and clothing.
I should like to examine, very briefly, the reasons upon which the minister bases his opinion that the taxes should be collected through the retailer. First, I will mention his least weighty reason, namely, that he would like to have the public realize that the war must be paid for as well as won. I do not think that is quite worthy of the minister, because the people of Canada realize in the very fullest sense that they have to pay for this war. I put that aside as an argument of no great weight.
A second argument he makes is that he has already made prices come down, and he cites instances in the city of Ottawa where prices of suits of clothes have been reduced. I have w'alked fup ,and down the streets myself, and have noticed in the windows, suits priced at $45, and in other cases at less; but jn many cases they have the magic number "45" attached to them, and he assumes that prices have been reduced from $55 or $60. I doubt whether he is justified in that assumption. I am not particularly suspicious of human nature; but 'I think our business men, retailers and others, are very shrewd, and they are apt to take advantage of almost every opportunity that presents itself. Personally, without casting any reflection [DOT]on the retailers of this or any other city, I would not be surprised if in ,some instances the prices of those suits of clothes had been actually less than $45 before the Budget was announced. The temptation is at least there, so that the argument is not very strong.
The minister advanced one argument which made some impression upon me and
JUhE 11, 1920
which is the only one that can possibly support the method of collection which he proposes. He feared, if the tax were collected at its source, through the importer or manufacturer, the pyramiding of profits which would result all the way down from the manufacturer or importer through the jobber to the retailer, and that the actual result would be that the consumer 4 p.m. would pay more than he would if the method which the minister favours were adopted. There may he some truth in that, but the other disadvantages of the method favoured by the minister so far out-weigh the advantages of other systems which could be applied as to make it advisable to discard the method now favoured by the minister. The objection to collecting the taxes through the retailer is, I think, briefly this-the great expense, to both the Government and the merchants concerned, of making those collections. The hon. member for Oxford North (Mr. Nesbitt) stated the other day that he did not think there would be any great expense attached to this method of collection. I come from a city which has many retailers, raany merchants, and one-and all seem to think that it places upon them an enormous burden of work and care to collect that tax honestly and fairly and to pay it into the treasury. The minister also stated that, as regards cost of collection to the Government, he did not purpose going to any great expense; that he thought he could trust the retailers to make their returns honestly and fairly. I am not going to take any great issue with that statement; but the minister has lived long enough to know that there is no class of people in Canada, nor probably in any other portion of the world, who willingly pay taxes, I do not care how patriotic those people may be. Those of us who know anything with regard to statements made in connection with the income tax, know there are very few men who deliberately pay that income tax except as they know they must pay it. Perhaps I am wrong in that; perhaps I am misjudging human nature; hut I believe I am right in saying that, as a general principle, people will not willingly pay taxes, no matter what the form of those taxes may be nor for what purpose they may be imposed, and if the Government wishes to get the tax, it must adopt some means of seeing that it actually receives that which it expects to receive. I believe in many cases the merchants will not collect all the taxes, nor will the Government receive the taxes
collected in all instances. In all this I am making no reflection upon the retailers as a whole.
- Again, there is so much lack of information on the part oif the people and on the part of some of the merchants as to commodities upon which these taxes shall be applied, that, in many instances, taxes will be collected from people entirely illegally because the commodities on which those taxes are collected are not 'taxable at all. I happened to hear yesterday of an incident which illustrates that point. A traveller who came from the city of Montreal went into a confectionery store in order to buy a box of candy priced at $1 or $1.20, and the retailer insisted on collecting from that man what he called a luxury tax, although the collection of it was not legal. I am afraid a great deal of that sort of thing will occur. Further, even if this method of taxation might be in the interest of a large mass of the people, it is not fair to put one section of the public, such as the merchants, to all the inconvenience and expense consequent upon this method of collection.
The other method of collection suggested is that the 'tax be collected at its source from the manufacturer or importer. If the minister decided to adopt that' plan, he would not 'be violating any principle already laid down by him, because, as a matter of fact, he has already adopted'that plan in other instances. I for one do not believe musical instruments, pianos, phonographs, are entirely luxuries. In the case of musical instruments the minister is collecting from the manufacturer; (the retailer of musical instruments does not. collect the luxury tax as such at all. If the principle be right in the one case, I am at a loss to understand why a departure is made from it in another case. Therefore, it would not involve any departure from a principle laid down by the minister if he desired to adopt one principle and observe it all the way through. If that method is adopted, he can simplify the -whole process to almost as great a degree as possible. Every manufacturer, every importer, every wholesaler, in fact every merchant, if he does his business in an up-to-date way, keeps a sales book or at least has some record of his sales, and it is the easiest matter, at the end of every two weeks or every month, to ascertain exactly what the sales have been and then calculate the tax upon them. And if the Government desires to verify the returns it is a much more simple way than to go from retail store to retail

store and search through thousands, and indeed hundreds of thousands, of sales slips which the merchants are expected to keep. In addition to that, I contend that the tax will not be felt as a tax. I maintain that the manufacturer or the importer will merely add that tax to his overhead expenses the same as any other overhead expense, and it will be absorbed into the general costs of doing business.
I rose to make one other suggestion and I am rather surprised that it has not been made before. Another method of collecting this tax has been suggested in the press and in discussions of this matter, but I have not yet heard it made in the House. In passing, I may say that I prefer the method just mentioned. But if the minister has objections to collecting the tax from the wholesaler or the manufacturer at the source of production because of a fear that the consumer will pay more, then I would ask him to consider the suggestion that the tax be collected upon the entire sales of the retailer as well as those now paid by importer and manufacturer. That method will have almost all the merits and advantages of collection through the manufacturer and importer. The books are there and the sales are shown, and there will be very little inconvenience and expense either to the retailers or the Government in making the collection, while it will remove the dangers which the minister sees in the pyramiding of profits all the way down from the importer or manufacturer to the retailer. The retailer will simply add the one per cent, or whatever the percentage may be, to his overhead, and it goes out to the consumer with very little added cost as compared wdth the method proposed to be used by the minister. You would, I believe, obtain almost exactly the same amount of money by employing that method of collection as by the present method, and with much less inconvenience. A retailer of this province who has been carefully collecting the tax for a period of ten days under the present system found that- during those ten days the sales amounted to something like $4,400, or $4,300 and that the luxury tax amounted to exactly $43. That is just as close to one per cent of the total sales, as you could arrive at, and I make the deduction from that that if that method were adopted of placing a tax of one per cent on all sales, except foods, you would obtain just about the same amount of revenue as if you adopted the method proposed. I do submit that it would be much simpler, would cost a great deal less and would be less inconvenient. I make this

suggestion for the consideration of the minister, and as I said on rising, I hope he has not made up his mind firmly to adhere to his other plan. I simply want to see the money obtained in the least burdensome manner, and with the least amount of inconvenience to the public and expense to the Government. .


Henry Lumley Drayton: 
Michael Clark: What the hon. gentleman has just read is the exact definition of an excise tax if I understand it. It was an excise duty imposed on goods manufactured in the country.


Henry Lumley Drayton: The hon. gentleman has a way of listening with one ear and closing the other. He has a way of shutting his ear when the argument is against him just in the same way as he sometimes clouds and closes his intellect when the argument is against him for in the very preceding sentence I read, exactly the opposite thing was done. The excise was put plainly, straightly and strictly upon the imported article and not only on the imported article but on the value of the imported article duty paid. The point really is too plain to labour, and I only labour it because I have the greatest respect for my hon. friend and I am sure he was sincere in the first instance when he

approached this subject. But he sees how the taxes are described in. this Act. If further light were required I would invite him to consider the automobile tax. If he looks at that tax he will find that it ia called an excise tax equal to ten per cent of the duty paid value of the imported article or equal to the manufactured cost if manufactured at home. I know my hon. friend always understood that there was no tea grown in Canada and that the excise tax on tea was certainly a tax on an imported article. That is what he called it when he voted for an excise tax. I refer him to the section dealing with the tax on tea. He will find the same thing in regard to cinematographs and other things. The thing is really, too plain, too clear, for further argument. It is a quibble that is unworthy of my hon. friend.
There is one other ground advanced by my hon. friend. He says that not only in the first instance did I shatter the English language, the dictionary and everything else but that to-day I am absolutely shattering and ruining all proper parliamentary procedure.
On the subject of parliamentary procedure I yield with the greatest deference to my hon. friend I do not know much about parliamentary procedure but I had hoped that when I came into this House I [DOT]was going to learn a great deal about it from my hon. friend. One of the things I am suffering from at the present time is the greatest sense of disappointment because I know my hon. friend could give me that instruction, I know that he knows the subject well, but again I am afraid that my hon. friend was not entirely sincere in the manner in which he approached the point. For example, he appealed in connection with the Budget debate, or rather in connection with the point he was making, to the hon. member for Shelburne and Queen's (Mr. Fielding) for help, for assistance and for light. Well, of course, it was not forthcoming. Why? Because the very thing that is being done to-day was done in this House in November 1896. It is no new thing to change Budget resolutions in Parliament. It is no new thing to change the duties when taxes have gone into effect. It is no new thing, after all, to try-never mind at what minute you attempt it-to try and do the right thing, and it was done in November 1896. Why, the tariff was introduced by the hon. member for Shelburne and Queen's, when he was Minister of Finance, in November of 1896. It wa.s approved in March

1897; and there the same question came up, that has to come up here when changes are being made. For what reason? In the public interest and to make the scheme of taxation proposed a better scheme, changes were there also made. In that case the section respecting the date of rates going into force provided that in cases where rates were reduced-and rates ivere reduced with the Government staying in office, as my hon. friend knows very well-refunds would be made dating back to November while increases-and increases were then made after the Budget had been introduced -only came into effect on the date the resolutions were adopted in March. So, Mr. Chairman, as far as the precedents of this House are concerned at any rate, what we are doing at the present moment is covered by precedent.
There is really one claim made by the hon. gentleman, and it is that the Government should come down to the House with an adamant face, shove their proposals through with the force of their majority irrespective of those merits which arguments and discussions here may substantiate. After all, the Government's responsibility is of such a character that in order to do the right thing and the honest thing the tax in the first instance can only be considered, as the hori. gentleman well knows, privately and without the intimate knowledge-under our methods of Parliamentary procedure-the intimate knowledge that an inquiry would give. Notwithstanding that, notwithstanding that an error may be made, in the opinion of my hon. friend there must be no change in the Budget but it must be forced through whether it be in the public interest or not. Well, Mr. Chairman, I do not know what the House thinks of that as a principle, but it would seem to m'e to be a very extraordinary one. I should have thought that no matter what legislation may foe introduced, it can be improved by discussion in the House and that unless measures are to be improved here from time to time there is not an awful lot of justification in having a House. It seems to me to be most extraordinary that the silver-tongued orator of democracy-who preaches democracy in the highways and the byways-does not, after all, understand its meaning, and that that silver-tongued apostle of democracy has today become the brazen-mouthed trumpet of absolutism and autocracy.


Some hon. MEMBERS:: Oh, oh.


Rodolphe Lemieux: This is not an academy, and it seems to me we have gone far afield

this afternoon to define a word the meaning of which has been practically decided a day or so ago. I wish to call the attention of the committee, in a few brief sentences to another aspect of the case, and I invite the attention of the Finance Minister to the amendment I am about to move. Let me say at once that I have received several letters and resolutions bearing on this subject. Personally I am quite ready to do my share to help this country to carry on. I have already formulated my objections to my hon. friend's resolutions. I consider that his taxes on luxuries are more or less taxes on necessities; but on this point we expressed our respective opinions when the Budget Speech was delivered and in the discussion which followed. I have no doubt that the House and the country will have to face the passing of these resolutions with their attendant consequences, although from now on perhaps a few amendments may be made. For my part I repeat that I am ready to face the situation, to help the country to carry on, provided my hon. friend will amend his resolutions so as to give a living chance to the poor man, and see that at least the necessities of life are not made taxable.	[DOT]
But I am rising this afternoon with a different object in view. As I stated a moment ago I have received several resolutions and letters bearing on the amendment which I intend to offer. When our boys left for the front, they left with the blessings of their parents, and also with the solemn promise made by Parliament and by Canada as a whole that their dependents would be eared for and that they themselves, if they returned, would be cared for by the country. In my humble judgment, no country in the world did as well as Canada for the dependents of the soldiers during their absence at the front. The Patriotic Fund, the Red Cross Society and the va'rious private organizations in the country, did fairly well by the dependents of our soldiers during the time the latter were at the front. But the soldiers have returned-at least the majority of them have-and in the case of those who have not returned and will never return the country has been providing for their families. Has the country provided in an adequate manner for those families? This is not the time to say. Speaking of those who have returned to Canada, speaking of those who constitute the Great War Veterans, there has been, I am bound to say, a sad experience. They have been refused by the Government the gratuity which in other countries has been paid to returned soldiers.


Henry Lumley Drayton: May I ask my hon. friend a question? I would very much like information regarding those other countries to .which he refers, and the amounts of the gratuities they granted to their returned men.
IMr. LEIMIEUX:	I am not saying that
this country has not done something for its returned soldiers. But as regards gratuities paid by some other countries, I will be able at a later stage to give my hon. friend full particulars. It is quite possible that Canada was not in a financial position to give the returned soldiers all that they demanded. I remember a very forcible statement made by my hon. friend's predecessor (Sir Thomas White) before a Select Committee of this House, and I am bound to accept it as an accurate statement of the case. However, I state the plain, bald fact that our returned soldiers, who had been promised that they would be cared for on their return, were refused the gratuity they asked from the Government.
But this is not the most serious difficulty which faces those men. On their return they are confronted with the extremely high cost of living. While this is very serious for the ordinary citizen, I claim that it is far worse for the returned soldier, for the former has not had his nervous energy depleted nor his earning capacity impaired; but the latter is not yet himself again. It will take the returned soldier who spent five, four, three or even two years at the front many years, before he regains his normal state of health, although he may not have been wounded. I invite the attention of the doctors who sit in this House as to the correctness of my statement.
It is true that Parliament has done something to help the returned soldier re-establish himself in civil life by giving him the benefit of vocational training; but still he is not on a footing of equality with his neighbour who remained at home to face the struggle for existence. It will be generally admitted, I believe, that the most difficult period for the returned man is this very period of re-establishment, for he has practically to start life afresh. Generally he is blessed with a family, and with the present high cost of living and handicapped by his impaired vitality, he finds himself unable to stand the strain of the economic struggle.
Therefore with the new Budget resolutions materially adding to the burdens of the tax payer, I appeal to my hon. friend (Sir Henry Drayton) to extend to the sol-

dier and to his dependents the hand of fellowship,-to be generous and at the same time to be grateful to the returned soldier. But my hon. friend will ask me: How can we create an exception? The law of the land must apply to every person, and the returned soldier should not be exempt from its operation. My answer, Mr. Chairman, is very simple. And let not my hon. friend believe for one moment that I am appealing to popular passion in what I am about to state; on the contrary, I am trying to help him. Yes, the law of the land must be applicable to every citizen and no one should claim exemption from its operation. Yet may I remined my hon. friend that during the war, while the soldier was at the front ready "to go over the top," to give his all for his country and for the great principles of democracy, under the stimulus of the most ardent patriotism, yet at home, when asking the people to fill the Treasury with their savings, the Government was giving to a special class of the community exemption from taxation. Loans were floated at a very high figure, and those loans, known as "Victory Loans," representing immense sums of money, mostly profits made out of the war, were issued with a special label "exempt from taxation." To-day I know of some war profiteers and of some very wealthy men, patriots at large, who have invested, and rightfully so, their savings and profits in those loans, and who are therefore absolutely exempt from taxation. Let me say, en passant, to my hon. friend the Minister of Finance that if there is one thing which has thrilled this country, it was his first administrative act of last fall when in his drive for the last Canadian domestic loan he refused to exempt the bonds from taxation. I give this credit to my hon. friend:	He was hold
and patriotic when he took that firm stand, which was in strong contrast with the stand taken by his immediate predecessor. We have been told that this country was intensely patriotic during the war. Well, Sir, as an evidence of our patriotism during the war let us never mention the Victory loans, except the last one, which was launched after the war, and which showed the loftier spirit and the nobler instincts of the Canadian people. All honour to my hon. friend. I have given him an example, and I have given him a precedent, the exemption from taxation of the Victory loans issued during the war when our boys were at the front exposing their lives. I say to my hon. friend that the returned soldier and his dependents will have to pay part of the

price of the enormous advantages secured by the bonded aristocracy of Canada. The high cost of living may be assigned to various causes, but I am quite sure that one of them is the fact that so many millions and millions of dollars invested in Victory loans are to-day exempt from taxation and do not yield a red cent to the needs of the country. As a Tesult the returned soldier after exposing his life at the front, finds when he returns to this fair land of his and ours that he has to pay for the financial blunders of my hon. friend's predecessor. Would you allay the feeling of unrest which exists among the soldiers? Would you prevent sedition? Would you call a halt to any unhealthy agitation in Canada? Would you put an end to this claim for a gratuity which the country cannot afford to pay? If you would, I can suggest a remedy to my hon. friend at once. I can assure him that the returned soldiers will as>k no favours from the Government in the way of exemption from ordinary customs duties and the other taxation burdens which Canada has imposed upon her children, but as my hon. friend is to-day asking Parliament to endorse a resolution which in his own words is temporary, and preeminently an after-the-war measure to meet a war contingency, I say to him, let the soldier and his dependents be exempt from the taxation which you are imposing by this measure. Mr. Chairman, the churches of this country are exempt from taxation on certain articles which they import for use in divine service. The Government accedes to the request of the churches because it respects the object which the churches have at heart-the morality, the Christianization and' generally the uplifting of the people. But patriotism is also a religion, and I believe there is no higher form of patriotism than the one which was exemplified on the battlefield by our soldiers.
I conclude my brief remarks in order to bring forth from the lips of my hon. friend the Minister of Finance an acquiescence to the principle of my amendment because he is too good a patriot himself not to stand, by the returned soldier. I therefore beg to move to amend the present resolution by inserting after the word "that" in the first line of the first paragraph the following words:
-except in the case of returned soldiers who have seen active service overseas and their dependents who shall be exempted from the said taxes for a period of five years from the date of

the sanction of the Act to be based upon the present resolution.


Henry Lumley Drayton: I do not know at the moment whether an amendment of that kind is in order, but I should not like to raise any question of order on a matter relating to the returned soldier. I can tell my hon. friend at once that of all His Majesty's subjects who could have any claim to exemption the claim of the returned soldier is greater than all the others put together and multiplied many times over. It is just a question how the returned soldier should be helped. It is just a question how he can best be helped. It is just a question whether or not-and this is a matter which has had attentive and anxious consideration-the returned soldier would like to be placed in a special class having regard to hi9 purchases to the amount of a few dollars in the half year and to the amount of not many dollars in the whole year. It is a question whether he would rather not be put in that class of. taxdodgers or something else. Would he not rather that the country should obtain as much revenue as possible even although he paid $1 or $2, yes, perhaps, $10 a year in luxury taxes? After all, what do these luxury taxes amount to? Would he not sooner pay, perhaps, $25 or $30 a year in order that the country should obtain as much revenue as possible? !It may well be that this returned soldier would say: ''I, who am in a position to pay, would rather pay my honest share so that my country may be in a position to help my less favoured comrade to have just a little bit more for pensions, yes, that my country may have a little bit more for the disabled man and for the widow of my fallen comrade."
I do not want to treat the returned soldier question in any slushy way, and by a pretence of helping him with a small exemption, to seek to curry favour, and so far as I can see, that is what I would be doing, if I were to do as is suggested. This matter is receiving very careful consideration; and if we give the returned soldier any exemption, 'I am inclined to think we should not do it in connection with a few luxury taxes, as the amount of exemption would be of little consequence in comparison with the sacrifices the returned soldier has made, but we should, perhaps, do something larger and bigger, maybe by giving the returned soldieT absolute exemption on income. That whole question, however, is in the hands of a very capable committee. I hasten to 219
assure my hon. friend that any feasible suggestion he can make as regards exemption which will really amount to something will be taken into consideration. We cannot, however, consider suggestions which, if put into effect, might be taken advantage of by traders who were not honest, because after all, how could you check the shops? When I considered this matter, the point that bothered me was this. Here is a shop which happens to foe the black sheep in the hundred. In that shop the merchant has sold goods on which luxury taxes ought to have been paid; but he says: I sold that to returned soldier So-and-so, and I sold this to returned soldier So-and-so, and the effect would be that you would not be giving exemption to the returned soldier, but, to a very large extent, you would be putting the dishonest trader in a position where he could exact the tax and, having exacted the tax, could put it into his pocket. That is the difficulty. There is no trouble at all about meeting my hon. friend on the question of what one can do for the soldier. We cannot do too much for him within the ability of the country to do and to pay.
Just one other thought. I would suggest to my hon. friend, in a spirit of the greatest kindness-should we not, for the time being, stop worrying about what |was done during the war? That is done. Why say that Sir Thomas White was the only man in the world who ever sold tax-exempt bonds when tax-exempt bonds issued in the United States make the issue of tax-exempt bonds by Sir Thomas White look as absolutely nothing. Moreover, the statement was made in this House only yesterday that one lof the reasons for trouble in this country was that the Government had surrounded themselves with a favoured few to whom they had given tax-free bonds. Of course, if that statement had not been made in this House, one would wonder very much where the gentleman who made it came from and what his mentality was. But the hon.
member for Maisonneuve and 5 p.m. Gaspe (Mr. Lemieux) should remember that every citizen, every white man left in the country, formed part of that band that is described as the band supplied with ,bonds, everybody from the highest to the lowest, from the poor man who could afford, out of his savings for the whole year, to buy only a little fifty dollar bond, up to the Rt. Hon. Sir Wilfrid Laurier. No more effective appeal was made, no nobler sentences were penned than those of the Rt. Hon. Sir Wilfrid



Laurier *when he asked his fellow countrymen to do their duty by subscribing to these bonds, thus becoming a part of the Governmental favoured few as described in this House yesterday. Everybody was in it; everybody was then doing as he thought best for Canada. Not a Canadian newspaper, worthy of the naane, was not dedicating space to this appeal to buy bonds. When we are all in it, is it not time that vre should stop quarrelling pbout it? Moreover, those bonds may be very readily obtained in the market at the present time, and although they are free of taxation, they may in some instances be bought today at less than par. That of itself is surely a sufficient answer. But the soldier's case does not rest upon that rope of sand suggested to support it; the soldier's case is such that, on his own merits, we in this House ought to do everything we can for him.


Michael Clark: There are
three grounds on which I find at the present time that I cannot support the amendment of my hon. friend (Mr. Lemieux) although, perhaps, he may be able to remove my difficulties. It would be an act of supererogation to profess sympathy for the returned soldier. I take it that every man in this House has sympathy for him. But the first objection I see to my hon. friend's amendment is that some returned soldiers are excellently well able to pay these taxes, and not only would they be excellently well able, but, as the minister has said, they would be very willing to pay them. How would my hon. friend proceed in a case of this sort? Would he exonerate those men whether they were willing and able to pay or not? That is a practical difficulty of great importance. The second point, which seems to me to be also of practical importance, is that there would be a very large opening for fraud. The practical difficulty of collecting which applies to these taxes generally and all around, would be intensified in this particular case; you would need to go around the country marking your returned soldier, and every retail salesman would have to have the mark. That is only incidental to the third difficulty. My third difficulty in regard to voting for this particular amendment is that if I voted for an amendment in favour of exempting somebody from this tax, I am afraid I would be misunderstood as being in favour of the taxes generally, and I want still, in spite of all that has 
fallen from the minister, to say that I am entirely unrepentant upon that point.
I think I shall be speaking within the bounds of the amendment if I take just a minute or two to pay some little return attentions to my hon. friend (Sir Henry Drayton) in regard to the remarks he devoted to me a few minutes ago. He started out with an assurance which I wa.s very glad to receive, that he did not take my opposition to these taxes as a personal thing. I am bound to say that his manner did not agree with his words, because I was rather glad, when he was getting back at me, that a couple of benches were between us for he seemed to be almost on the point of making a pounce upon me. We shall however, rub out his manner and accept his words. I was surprised to hear from the minister that I was ploughing a lone furrow in regard to my opposition to these taxes. I had an /dea that he had been receiving deputations night and day on this subject. If I am ploughing a lone furrow in this House there are plenty in the furrow outside, as my hon. friend knows very well. One of his followers told us that he had under his hand some fifty telegrams of protest at the time he was speaking.


Henry Herbert Stevens: The hon. member is
hardly correct. I said I had about fifty telegrams suggesting changes and improvements which I commended to the consideration of the minister.


Michael Clark: If they want
changes and improvements they can hardly be in favour of the original thing.


Henry Herbert Stevens: They want to make a
good thing better.


Michael Clark: Now, in regard to the question of direct taxation, my hon. friend (Sir Henry Drayton) has charged me with inconsistency. Let me say that I have been in favour of direct taxation, but " direct " is not the only word to qualify a good tax. I never said I was in favour of direct taxation without regard to its incidence, its ease or its difficulty of collection, and a number of other considerations. Directness is not the only quality we must consider in a tax. There are two other qualities that occur to my mind as given by Adam Smith, and he has never been contradicted in regard to them. The first point is that a tax ought to be levied, as far as possible, in proportion to the ability of the people to pay them.


Henry Lumley Drayton: Hear, hear.


Michael Clark: That is why
Germany and the United States followed the example of Sir Robert Peel and Mr. Gladstone in finding the easiest method of collecting direct taxes in the shape of income taxation. But a greater than Germany, a greater than the United States, a greater than Peel and Gladstone is here and says he discards the income tax, and introduces a lot of brand new things in the shape of sales taxes, although he evidently does not know exactly how he is to get them, because he forgot, before he sat down, to answer the most practical question I put to him as to how he was going to deal with those who had already paid, and how he would collect the taxes that remained. He does not answer the practical questions, which after all are all-important in the committee stage of business. Another elementary quality of good taxes is that, in addition to being direct, they should be easy of collection. That is another of Adam Smith's cardinal principles, and as my hon. friend has asked me for some lessons in political economy he is welcome to these primer suggestions in that direction. Has my hon. friend found this tax easy of collection up to now? The great majority of the people concerned want to prevent him from starting to collect them at all. .


Henry Lumley Drayton: May I ask the hon. gentleman a question?


Michael Clark: My hon. friend will have ample opportunity of expressing his opinions: we are in committee.


Henry Lumley Drayton: I simply desire to say that they are not easy of collection. They are almost as difficult as the income tax, and I only hope they will not be as bad.


Michael Clark: My hon. friend has a short experience of the collection of income tax. After all, it has been found in those countries I have mentioned that the income tax is at any rate absolutely certain and well defined in its incidence, and that is also a point to be considered in a good tax. About the incidence of these taxes there is no certainty whatever; if a man does not buy he does not pay. He avoids taxation altogether, and there are a number of people who are taking full advantage of that avenue of escape at the present moment. But let me draw the attention of my hon. friend to the fact that if he took the advice offered to him by the hon. member for East Elgin and sharply graded the income tax up from the minimum, 219*
gradually grading down the sum at which he collected the tax, its incidence would be absolutely fair. And if he- will condescend to learn something from the countries that have been imposing income tax for generations he will find that it is vastly easier to collect than this tax. I am glad to have the admission that my hon. friend does not find these taxes easy of collection.
Now, I have met his main point, and the only other point I want to meet is one in which his argument was shared by my right hon. friend the Prime Minister the other night. The thing that rather bothered me in the discussion, which I am reluctant to revive, is the contention, in support of the title, that it had been allowed to escape the notice of Parliament two years ago. Well, I would say to both my hon,. friends that they do not go far back for their precedents, and if we made a mistake on a small scale two years ago that would hardly be a reason for continuing it upon the present scale of magnitude. For one thing, I have not a very great deal of respect for precedents set by this Parliament. Perhaps my right hon. friend and his colleagues would like me to tell them why. Well, if this Parliament only gets time enough it runs away from its own precedents, and so does the Government. The Government, in the person of 'the ' Minister of Trade and Commerce (Sir George Foster), introduced a resolution in favour of daylight saving and carried that measure almost nem. con. There were a few voices crying in the wilderness in protest against it, tout my hon. friend the Minister of Finance was not then in the House. There were some of us who told the Government that they were getting into a sea of trouble over the matter, but they paid no attention to us. They never heed any warning until they are in trouble, and they therefore disregarded the representations that were made to them. The next year, what does this Parliament do, the Parliament that I am asked to accept as one entitled to set precedents? Parliament, by a vote of two to one, rubs out its almost unanimous- vote of the year before; and I think I am therefore giving a good reason why I should not accept with any great heartiness precedents set toy this Parliament, especially precedents of such recent origin as two years ago, in contradistinction to the well-established practice and knowledge of the last hundred years. My hon. friend was not in Parliament, but he was a handy man at the -time. Of course, he was chairman of the Railway Commission, and the real fact of the matter was that neither Parliament nor the

Government hid anything to do with the setting of the time of the country. It was being set by the railways of the United States. When it was necessary to have a precedent in this matter the hon. gentleman (Sir George Foster) changed the time. Now, clearly when the first law was established it must have been a federal law, otherwise so old a parliamentarian as my hon. friend the Minister of Trade and Commerce would never have introduced the measure and commended it to Parliament. But when the United States railways ruled in a contrary way, my hon. friend comes down, and he says to Parliament: "This is all wrong. The precedent of Parliament and of the Government is all wrong. This is a municipal matter, and you had better rub out last year's doings and proceed differently this year." And now we are proceeding two ways and Parliament is having nothing to say about it. The municipality stands on one side, the railway stands on the other. Parliament stands in the middle of the Pleiads, looking at one clock and at the other, while the Government says: "You are in the middle; you pay your money and take your choioe." I hope I have given my hon. friend sufficient reason why I have not a great deal of respect for his precedents. I do not want to renew the argument upon this question of title, nor do I desire to hold up these taxes. I do not want to be misunderstood. I understand the responsibilities of the Government,, but a 'certain amount of parliamentary criticism is proper, and no man of the courage of my hon. friend resents it. He is able to retort in fair good style, and if he had a good case he would	be a	first-rate debater.
He will find it is a great help to his debating powers to get his case as good as he can but I am afraid that before this thing is through he will find that his case is a very bad one. I do not want to hold this up. My hon. friend displayed some little heat. I like a man to be able to get mad once in a while even in Parliament. You remember that the Scriptures say "Be angry and sin not". But I do not like a debater to be so forgetful that he does not think of answering a practical question. I want to know what is to become of the taxes that already have been collected under his first method of procedure because I apprehend he is not going to stick to the money and keep the rest of it as well. Could he give us any idea of how far he will accede to the appeal which I have made, supplemented by my hon.

friend from Waterloo (Mr. Euler), and which I dare say will come from other parts of the House? Is he disposed to respond to the appeal that these taxes shall be collected at the centre instead of from the retailers?


Henry Lumley Drayton: I must confess that I find it altogether difficult not to answer the appeal made by my hon. friend. I think he really wants an answer this time. I thought before that he did not. I thought before that he was not very anxious to get an answer. Perhaps I should not speak for the Government because we have not had a chance for consultation over this question which has been brought up, but personally, I am not convinced that the method proposed is not the right one. Personally, I am not convinced that our first duty is not to the customer in the shop, to the ultimate consumer rather than to the gentlemen who are in business. Personally, my feeling is that we should leave the end of the string just where we leave it whether, as my hon. friend says, the tax may or may not be paid. Just where we leave it so that the customer has the right to make an extravagant purchase if he pleases, just where we leave it so that the full incidence of the tax will fall where we believe it will fall and there is no doubt where it falls and who is paying it, and just where we leave it so that it is impossible for the merchant to make a profit on the tax. I am perfectly free to admit that the method which we propose is the easier. It is a question whether the Government should consider ease of administration, its own comfort-yes, more than that, its own popularity It is a question whether it should consider its own popularity or whether it should consider the needs of the people and the necessity of doing everything it can to reduce cost. I know these taxes are very unpopular but I never took up the position of Finance Minister with any idea that I could be popular and at the same time act decently towards the country. I know I am making enemies every day, but I care not how many I make if I can do. anything in my humble way towards pulling down costs, bettering conditions and advancing the welfare of Canada. After all is not the sense that one has done his duty to his country really better than popularity gained by doing otherwise? I do not pretend to know it all. I have been greatly impressed by a number

of the ^remarks which have been made. As to the collection of these taxes, we have the Department of Inland Revenue with offices to collect them all over the country. The Department of Inland Revenue will look after the collection of these taxes. The ordinary way of collecting a tax of this kind would be to treat it just the same as we treat the excise tax which manufacturers have to pay and as we treat the excise tax collected from the people that are selling whiskey. We would get from them a monthly or a bi-monthly statement. It is not suggested that the statement should cover all the sales. That statement should only caver transactions involving the payment of the tax. That would be the ordinary way of collecting the tax. It is certainly true that we would have to engage more people-a lot more people-there is no doubt about that. There is that objection to it. There is another way that is being considered to see how it would work out practically and which, if possible, would do away with the accounting question, and that is by using stamps. The merchant would have to have stamps on hand and an arrangement could be made by which he could buy them readily at the post office at any time. These stamps would have to be affixed to the Bill and cancelled. Whether that will be done I really at the moment could not definitely say but that in brief will be the method under which these taxes will be collected.


Michael Clark: With a view to helping my hon. friend on that question of stamps may I remind him that we have been collecting taxes by stamps and he himself is making an alteration in the case of drugs because of the difficulty he has had in getting the money. I heard of a case the other day where a retail druggist got $10 worth of stamps at the beginning of the imposition of this tax and he showed them to a man in his drawer still unused, the result being that the Government got nothing. In ninety-nine cases out of a hundred druggists forget to put the stamp on. If the retailers are going to forget to put the stamps an to anything like the same extent the minister is not going to get as much money out of this tax as he expects.
'In regard to his courage and determination to be unpopular, let me remind him that Mr. Gladstone once said that a Chancellor of the Exchequer who was not prepared to face unpopularity in the discharge
of his duty is not worth his salt becaus* he is the custodian of the public finances and his first consideration ought to be the public good. But, in my hon. friend's ex-_ traordinary desire to be unpopular, which is somewhat abnormal amongst politicians, he should not lose sight of the necessity of getting an easy method of collecting the tax-or rather not easy but inexpensive. That is his first duty. In spite of his intense desire to be unpopular he must get the most money he can for the Government at the least possible expense.


Georges Henri Boivin: This exchange of opinions between the hon. member far Red Deer (Mr. Clark) and the hon. the Minister of Finance (Sir Henry Drayton) is very interesting indeed but I must remind the committee that the amendment proposed by the hon. member for Maisonneuve (Mr. Lemieux) has been entirely lost sight of. There is an amendment before the committee and under the rules the discussion must be relevant to that amendment until it has been disposed of.


George Eulas Foster: I quite realize the enormous debt of over $2,000,000,000 that we have to meet consequent upon the war. We know that it is necessary to adopt special measures, and in some cases extreme measures, in order to obtain the revenue necessary to meet that debt. We were not satisfied with the Budget as it was originally introduced, but the Finance Minister now proposes many changes in connection with it. Whether or not that is the proper and logical thing to do is for the House and the people of this country to decide. The Finance Minister proposes changes in the taxation in connection with the boot and shoe trade, the tailoring trade, ladies' wearing apparel and other trades. He proposes to do that by taxing the excess over a certain amount-


Georges Henri Boivin: I must immediately enforce the rule that has been laid down. I would ask the hon. member, for the present, to confine his remarks to the amendment. When that has been disposed of he will be perfectly in order in discussing the proposed changes.


Thomas Foster: I would like the chairman to read the amendment.


Georges Henri Boivin: Mr. Lemieux proposes to amend the present resolution by inserting after the word "that" in the first line of the first paragraph, the following words:
Except in the case of returned soldiers who have seen active service overseas and their

dependents, who shall be exempted from the said taxes for a period of five years from the date of the sanction of the Act to be based -upon the present resolution,
' In other words the amendment provides that returned soldiers shall be exempted from these taxes.


George Eulas Foster: While this amendment may appeal to many members,,and to many people throughout the country I do not think it will appeal to the majority of Canadians as a whole. We are prepared to assist the returned soldiers in every way that we can, and we have gone a long distance in that direction. In fact I think this Government has been more than generous in assisting the returned soldiers and their dependents in many ways. But when it is necessary to raise a revenue for the purpose of carrying on the business of the country, and to assist in its development, it is a question whether to grant and exemption, which will be so far-reaching in its scope, is the proper thing to do. Members have not had time to carefully consider whether they should support this amendment or not. On the face of it, however, it does not seem reasonable that we could accord the amendment support when it will have such far-reaching effect upon the revenue that we are trying to raise. I am afraid this amendment would deprive us of almost fifty per cent of the revenue that we are aiming at, and we would have to make up that deficiency from other sources. Therefore I do not think it would be in the best interest of the country to support an amendment of such a nature at this time. At the same time we all sympathize with its objects and if the financial position of the country warranted us in granting this exemption we would all be delighted to do it.


Isaac Ellis Pedlow: I do not propose to enter upon an academic discussion of the principles of the Budget, or indeed to participate in the pleasing discussion which took place between the Minister of Finance and the member for Red Deer, but will confine myself to the amendment before the committee. There is no need, as the hon. member for Red Deer very correctly said, for any one to protest against the proposition when his sympathies are with the returned soldier and his dependents. But the amendment of the hon. member is altogether impracticable; in actual working out it would prove quite impossible. I remember very well a practice which at one time obtained in the retail trade of this country that 
will serve to illustrate the difficulties which would attend the operation of such a proposition. The practice in question was to give a special discount to certain privileged classes in the community. The retailers accorded a discount of ten per cent to dressmakers, to clergymen, to charitable institutions, and to the clerks in all the retail stores. Even had the privilege stopped there it would not, perhaps, have been an unmixed blessing. But unfortunately the dressmaker and her friends and her friends' friends obtained the discount and the same thing happened in the case of all the other classes who enjoyed the privilege. From my own personal experience I figured that ninety-five per cent of the retailers' customers enjoyed the privilege while the remaining five per cent, who lined up and paid the full price of their purchases and never obtained the discount, were discriminated against. The practice was discontinued and now no special favours of this kind are granted by the retail merchants. I am afraid that the same conditions that obtained when this discount was in force would be created if the attempt were made to put my hon. friend's amendment into operation. As a result of my experience in the case of the retailers' discount I cannot see my way to support the amendment.


Mr. LOGGIE:: I am of the opinion that it is impracticable to put the amendment into execution. If you do not apply the taxation law to returned soldiers I presume you would have to grant a similar exemption to their families, and also to the relatives1 of deceased soldiers. It would be unfair if you did not carry out the exemption to that extent. Imagine, if you will, a customer buying a suit of clothes, or a dress, or a blouse, or some other garment in a large departmental store-


Mr. DUFF:: Corsets.


William Stewart Loggie: Very well, a pair of corsets. The customer notifies the clerk,. "I am the wife of John Jones, a returned soldier" or she says,, "I. am the daughter of a returned soldier", or "I am from Vancouver and a returned soldier". Just imagine, if you please, the practical impossibility of executing such a proposal. In my judgment under all the circumstances it is not worth considering.


Mr. McKENZIE:: Of course, the hon.
member for Northumberland (Mr. Loggie) has said that this is an unspeakable and impracticable proposition, and I suppose that is the end of it. However, occasional-

ly we have to differ from the hon. member and decline to follow him slavishly. But the hon. member from Maisonneuve (Mr. Lemieux) was for many years a Minister of the Crown, and in experience and service in this House, although not older in years, he is a much older member than my hon. friend from Northumberland,, and with all his experience and ability he has thought it advisable to put this amendment before the committee. I take the responsibility, therefore, of following in the footprints of my hon. friend from Maisonneuve and of saying that this proposal is not only worthy of favourable consideration at the hands of this committee, but that an effort should be made to carry it out. The men who served at the front and won for us the liberty which we now enjoy have earned for themselves for all time to come every possible freedom, and especially freedom from taxation of this kind.
I f at the date of his enlistment any soldier had made it a condition precedent that upon his return home he should be exempt from all war taxation, would not every one in this House and in the country have at once said: "Certainly, you go to the front and do your part, and oh your return you shall never be called upon to pay any war taxes, for we acknowledge that you have done your part and deserve to be exempt from paying any of the expenses of the war''? Would not that have been regarded as an absolutely reasonable proposition? The Minister of Finance states that possibly the returned soldiers do not want to be exempted. Since his Budget Speech was delivered a gathering of returned soldiers in the city of Toronto considered this question and passed a resolution to the following effect:
-whereas the returned soldier and his dependents have already borne their share of the burdens of war, and contributed in invaluable services to the preservation and prosperity of the state, and whereas the recent raise in taxation as set forth in the Budget will increase the difficulty of getting re-established in a productive capacity by greatly augmenting the cost of living, all returned soldiers who have seen overseas service should be exempted from the new taxation for a period of at least five years. That the production of a discharge certificate be considered sufficient evidence of a right to this exemption. That legislation to this effect be enacted by the Parliament of Canada.
That, Sir, is a sufficient answer to the suggestion of the Minister of Finance that our returned men do not want this exemption. We have a right to suppose that this gathering of returned veterans in the city of Toronto-which contributed so much to the success of the war in men and money-expressed the true sentiments of the soldiers generally.
I am not going to labour the question, for it is clear to every one. We say that the soldier has done enough in winning the war, and that we who stayed at home should at least pay his bills while he was away. That is what we are asked to do-to exempt him from contributing towards the payment of our war debt. I have much pleasure in supporting the amendment of my hon. friend.
Amendment (Mr. Lemieux) negatived on division.


Georges Henri Boivin: Shall the resolution
carry?


Edmond Proulx: Before the resolution carries, Mr. Chairman, I desire to endorse the views of my hon. friends from Red Deer (Air. M. Clark) and North Waterloo (Mr. Euler) that the tax could be more easily collected from the manufacturer and the wholesaler. There will be no less evasion if this method be adopted, and I- cannot see that there would be any difficulty in putting it into practice. The Minister of Finance has spoken about stamps. Well, some retailers live quite a distance from the Inland Revenue Office, and as on some sales they will have to put thirty, forty or fifty cents they will have to keep a big stock of stamps on hand for each day's business. I favour collection of the tax from the wholesaler and the manufacturer instead of from the retailer.


Mr. DOUGLAS (Strathcona):: I wish to support the contention raised by the hon. member for Vancouver Centre (Air. Stevens) as to the feasibility of collection of certain of these proposed excise taxes, ^e raised the question of hats. A hat is an absolute necessity to every one in this country, but there is no distinction in the schedule between felt, straw, or canvas hats. Aly information is that no hat manufactured in Canada can be retailed to-day at $5; so that all Canadian made hats will come under the operation of this tax. If a man buys an imported hat-which may be economical in the long run-he cannot buy one under present day prices at less than $10 or $12, so he pays a very high price. There is another item of interest to which I desire to call the minister's attention, and that is underwear. The tax does not affect summer underwear at all, because summer underwear is made of cotton and is reason-

ably cheap and would therefore come within the exemption, but- winter underwear will be taxed. This is a country that demands wool in the winter and the limit which the minister has placed on underwear will, in my judgment, compel everybody who wants to wear woollen underwear to pay this tax. Woollen underwear is not a luxury at all but an absolute necessity in this country in winter time. I notice that the minister has raised the exemption in the amended schedule to $3 a garment, but he has left the union suit at $5. Now, no one can buy a union suit that has any wool in it for $5. It might be called partially wool, but I doubt very much if there would, be any wool in it. The consequence will be that every one who wears a union suit will be forced to pay this tax. So as far as that item is concerned the idea of this being a luxury tax is absolutely wiped out; it is a tax on a necessity. Now the purpose of the tax, as T understand it, is to tax luxuries only, or to get as close to luxuries as possible. As to articles of necessity, such as woollen underwear, I think the minister would be well-advised to revise Kis exemption list so that the people can wear woollen underwear in this country in winter without being mulcted for a fine of ten per cent.


Henry Lumley Drayton: If the hon. gentleman will pardon my interrupting him,
I would suggest to him that we will probably gain time, and information as well, if we take up the schedules item by item, confining the discussion to one item at a time. We have had a good deal of general discussion, and perhaps the hon. gentleman will agree that that is the best plan to adopt.


James McCrie Douglas: I am quite prepared to agree to that, but I thought the whole resolution was called.


Georges Henri Boivin: I hope the hon. member for Strathcona will give way to the hon. Minister of Finance for, strictly speaking, the hon, member for Strathcona has the floor and the minister cannot interrupt him without his permission.


James McCrie Douglas: I will be glad to do so.


Georges Henri Boivin: Sir Henry Drayton
moves that this resolution be now considered section by section, paragraph by paragraph, and item by item, and that the debate be confined strictly to the item under consideration. Is it the pleasure of the committee to adopt the motion?


William Stevens Fielding: I quite agree that there will come a moment when we can better deal with this resolution item by item. In the meantime there has been a general discussion with regard to the method of collecting these taxes, and I do not think we should be shut off at this stage from this general discussion. If my hon. friend's object is to confine the discussion to one item at a time, I think he ought to wait until a later stage and let the general discussion proceed.


Henry Lumley Drayton: Might not a
general discussion be had after we shall have considered the items separately? It well may be that such changes will be made when we are considering the items separately that the general issue will be somewhat changed.


Mr. BELAND:: Is there any likelihood that there will be more alterations?


Henry Lumley Drayton: You never can tell. Some hon. gentlemen are singularly persuasive.


Henri Sévérin Béland: We understood these schedules were final.


Thomas Foster: There may be wisdom on the other side of the House that has not yet been uncorked.


Henri Sévérin Béland: I have not yet spoken.
I he CHAIRMAN: The motion could be amended to the effect that after the items have been separately considered a general discussion concerning the method of collection and the mode of taxation would be then, in order.


William Stevens Fielding: I would not ask for a motion if my hon. friend so understands it.


Henry Lumley Drayton: Quite.


Georges Henri Boivin: With that understanding,. is it the pleasure of the committee to adopt the motion?


Mr. DAVIS:: Would it not be better to have that discussion first?


Michael Clark: I endorse what fell first from my hon. friend for Shelburne and Queen's. These are new taxes of immense magnitude and of immense importance to the life of the people, as I think they will be so found in their application. Perhaps I have taken too much of the time of the committee myself, but there are other members who want to engage in a general discussion, and I do not think there should

be any disposition to cheek it. This is not a divorce ease. We are considering taxes that affect the whole people of Canada, and I strongly support the first suggestion of my hon. friend from Shelburne and Queen's that the general discussion should not be curtailed.


Georges Henri Boivin: Perhaps the committee will allow the chairman to say a word. His position in connection with the resolution, if he is to assist the committee in making progress, is a very difficult one indeed. The rules provide that when we are discussing an item in committee, the speeches must be strictly relevant to the item under consideration. When we are discussing a Bill, the speeches must be strictly relevant to the clause under consideration. When a resolution is before the committee, the discussion, unless some motion to a different effect is made, may wander from one end'of the resolution to the other. If a motion is made to the effect that the general principle of this resolution shall first be debated and that speeches be limited to a discussion of that general principle we shall make just as good progress as by adopting the motion which is now before the committee. The trouble is, however, that without a motion of this nature, an hon. member will give his ideas concerning the tax upon boots and shoes, another his ideas concerning underwear, and a third his ideas concerning watches and jewellery, and all these hon. members will, under the rules, be strictly in order. I think that the discussion should be limited to the general principle of the resolution, or it should be perfectly understood that we shall first go through the list item by item, and that when that has been done, the debate will be resumed upon the general principle of the resolution before the Chair.


Jacques Bureau: May I be allowed to say a word? Mr. Chairman says that one member will rise and discuss boots, another watches, another hats, and so on. He stated the Tules perfectly correctly that when we are discussing a Bill we discuss it clause by clause. As I understand it, clause No. 1 of this resolution is equivalent to a clause of a Bill, and (a), (to), (c), (d), etc., to subclauses, and therefore under the rules any articles mentioned in a subclause of clause 1, say, could be discussed when clause 1 was under consideration, and so on with clause 2 and the other clauses. The rules do not say that a clause shall be discussed phrase by phrase, and the items in these subclauses correspond to a phrase in a section of a Bill. It would be very
difficult indeed to confine the discussion to only one of the many items enumerated in a subclause, such as hats, for instance. We are discussing the imposition of a tax on certain things, and I think, as a part of that and inherent in that, there is the way in which the tax shall be collected. These are all items which are supposed to form part of this tax. Would it be considered within order to discuss the mode of collection of this particular tax, or shall we have to confine ourselves to boots and.shoes, pumps and slippers, and so on, and then discuss the mode of collecting the tax?


Henry Lumley Drayton: I thought we
had already discussed at some length the mode of collecting the tax.


Ernest Lapointe: I have been waiting
for an opportunity to say a word on that matter.
tSir HENRY DRAYTON:	I sympathize
with my hon. friend; but at least my hon. friend will think the be6t word has not yet been said on that matter, and I do not want the committee to be disappointed for one minute. The whole thing is that we should make ' some progress, and there is no good going round in a circle, arguing one minute on a principle and another minute on items having regard to particular commodities or cost. I am entirely in the hands of the committee. It does not make the slightest difference to me whether we start with items now and try to get all the items into our head, to understand each of them and the point at which the value shall be left with each of them, and then perhaps, with that additional information, deal with the question of principle, or whether we agree to discuss no items at all now, but merely the principle. We must make up our minds to discuss either one thing or the other, or the discussion will be interminable.


William Stevens Fielding: I do not think it is
possible to draw a sharp line of demarcation between the principle and the details. While discussing the principle, one may have to draw illustrations from the details. I do not think it is possible to avoid that.


Henry Lumley Drayton: I do not think so.


Michael Clark: A general discussion will shorten the discussion in committee on the details.


Thomas Foster: The members should have an opportunity of discussing the principle in the amended Budget.


Henry Lumley Drayton: I withdraw the motion for the moment.
Motion withdrawn.
Mr. .McKENZIE:	The other evening I
called attention to the fact that it would be difficult for us to make progress on these resolutions with the numerous changes proposed. I have in my hand a copy of the Budget Speech in which the original resolutions appear, but they have been very materially changed. The minister may have a copy of the resolutions as amended, but I have not, and he is speaking Of one thing and I have before me another. Every member should have in his hand a printed copy of the resolutions as amended. In that way we would get along faster.


Henry Lumley Drayton: I refer the
hon. member to Hansard, page 3446.


Georges Henri Boivin: The amendments were printed in Hansard of June 9, in detail, and they are also to be found in the Votes and Proceedings of yesterday.
At Six o'clock the committee took recess.
After Recess.



PRIVATE BILLS.


[Stage Direction]
Bill No. 142 (from the Senate), for the relief of Jennie Wright.-Mr. Fripp.
Bill No. 143 (from the Senate), for the relief of Alfred Charles Edwin Westley.- Mir. Fripp.
Bill No. 144 (from the Senate), for the relief of George Orville Scott.-Mr. Fripp.
Bill No. 146 (from the Senate), for the relief of Harry Davis.-Mr. Wallace.
Bill No. 147 (from the Senate), for the relief of Elizabeth Conway Murray.-Mr. Fripp.
Bill No. 148 (from the Senate), for the relief of Lockhart Pierce Sutton.-Mr. Douglas (Strathcona).
Bill No. 149 (from the Senate), for the relief of Frank Fulsom.-Mr. Fraser.
Bill No. 150 (from the Senate), for the relief of James Proudfoot.-Mr. Hocken.
Bill No. 136 (from the Senate), for the relief of James Lyon Lincoln Cobbin.-Mr. Douglas (Strathcona).
Bill No. 154 (from the Senate), for the relief of Albert Ernest Bulley.-Mr. Fripp.
Bill No. 155 (from the Senate), for the relief of Beatrice Booth Gendron.-Mr. Fripp.

[Stage Direction]
Bill No. 159 (from the Senate), for the relief of Mary Oakley.-Mr. Fripp.
Bill No. 160 (from the Senate), for the relief of Margaret Elizabeth Cooper.-Mr. Mowat.
Bill No. 161 (from the Senate), for the relief of Catherine Burfoot.-Mr. Nesbitt.
Bill No. 162 (from the Senate), for the relief of Margaret Henrietta Pettit.-Mr. Mowat.
Bill No. 163 (from the Senate), for the relief of Thomas Lindsay Thacker.-Mr. Blake.


[Stage Direction]
House again in Committee of Ways and Means, Mr. Boivin in the Chair.
Georges Henri Boivin: When the committee
rose at six o'clock the amendment proposed by the hon. member for Maisonneuve had been disposed of, and Mr. Douglas had the floor.


James McCrie Douglas: Atsix o'clock I was dealing with what I considered to be the inequalities in connection with the exemptions in the proposed Budget resolution now before the committee. I was calling attention to the fact that underwear of woollen texture could not be regarded as a luxury in this country; yet under the resolution every one wearing woollen underwear will have to pay. I think we ought to consider the question as to the way in which the exemptions will work out in practice. I am not criticising the Budget when I suggest to the minister that certain changes might be made in regard to the values which he has placed on these several goods for exemption purposes. When we come to the question of woollen goods we find that an article of woollen manufacture, namely, a sweater coat, is subject to the tax from $15 up, and yet a com- * bination suit made of wool is taxed from $5 and upwards. The question of luxury does not enter into the case at all, and I suggest that that is a great inequality. Then we come to the question of suits of clothes.
A suit of clothes is exempted up to $45, while an overcoat is exempted up to $50. There is more cloth contained in a suit of clothes than there is in an overcoat, and there is more expense entailed in manufacturing a suit of clothes than in manufacturing an overcoat. I am just pointing this out so that the minister, when he brings in his Bill, will not have to amend it after it

is brought forward. There may be some other items of the same character and, as I understand that the minister proposes to discuss the resolutions item by item, I will defer any further criticism along that line until the items are taken up seriatim.


Ernest Lapointe: Mr. Chairman, I
merely wish to submit the views of the Quebec Board of Trade and the Ketailers' Association of Quebec as to the collection of these taxes. These views are along the line of ithe argument expressed and set forth hy my hon. friend from Waterloo (Mr. Euler) this afternoon. I have heard many members since the beginning of this debate express the opinion that the best method of collection would be that the tax should be paid by the manufacturer or importer. The hon. the Minister of Finance has not given any answer to these representations and has not presented any argument why this system should not be adopted. The only hon. member who has expressed himself as opposed to that method of collecting the tax is the hon. member for North Oxford (Mr. Nesbitt), and I must say I have not been much impressed with the soundness of his argument in that regard. I think the proposed mode of collecting the tax will hit the poor consumer more heavily than the wealthy consumer. The poor consumer usually buys from the small trader. The goods generally pass through three or four hands before reaching the small trader. The manufacturer sells to the jobber; the jobber to the wholesale merchant, the wholesale merchant to the retailer, and the tax of one per cent must be collected every time; so that at the end, in many instances, the consumer will have to pay three or four per cent instead of one per cent. On the other hand, the wealthy consumer buys in large stores where the trader usually buys directly from the manufacturer. Moreover, there are many merchants-I know there are some in my own riding-who manufacture many of the articles they sell, and in these cases the tax which will be paid will certainly be less than the tax which has to be paid by those who buy from the country merchant. I wish to read the resolution adopted by the Quebec Board of Trade. It is in the French language but, as the Minister of Finance is a scholar and is versed in both languages, I think it may be read in French, only he will have to listen to me if he wants to know what I read. It is as follows:


[Stage Direction]
A resolution of the Quebec Board of Trade.
Thursday, May 27, 1920.
Whereas the Government, by their new sales and luxury taxes, are only anxious to lower the cost of living and to restrain extravagance, and at the same time increase their revenue;
The Quebec Board of Trade, after duly considering the new fiscal policy of the Government and without the least intention of protesting against the levying of new taxation, which it deems pressing and unavoidable, has nevertheless made up its mind to respectfully represent to the federal authorities that should they fail to bring in such changes as indicated by the board, they will certainly fail to attain those two laudable objects, and moreover unconsciously countenance fraud to their own detriment:
1. Because, all things considered, the one per cent sales tax hits only the poor consumer who usually buys from the small dealer alone. Now it as known that goods pass through the hands of at least three classes of middlemen before reaching the small dealer; the manufacturer sells to the jobber; the jobber to the wholesale merchant, the wholesale merchant to the retailer, and the tax of one pea* cent must be collected at every stage, so that at the end the poor consumer has to,pay a tax of four per cent upon the goods he buys.
As for the rich consumer the conditions are not the same; he buys generally in the large stores, and the big merchant buys as a rule from the manufacturer directly;
2i Because the collection of these duties will certainly necessitate, in the store as well as in the Finance Department, employment of a large supplementary staff, of clerks and accountants ; and as there is at present a great scarcity of labour, merchants will be forced to draw new hands from the country at a time when production is everywhere so much needed [DOT] this will bring inevitably a new increase in wages and salaries and a consequent increase in the cost of living.
As we already have pointed out the new taxes on sales and on luxuries, under the present circumstances, will certainly tend to stimulate the peddling trade and encourage fraud. It is a well known fact that the small country merchants and the peddlers do not keep books; therefore it will not be an easy task for the officers of the Government to get an accounting of the sales made by these people and to collect the duties: then, they will have to meet with deception on the part of peddlers and country store-ikeepers.
It is a well known fact too that many merchants manufacture, themselves, goods which they retail in their own stores; these merchants will escape the 1 per cent tax on these goods to the great detriment of their less fortunate brethren who have to get the same goods from the wholesale merchants.
Therefore the members of the Quebec Board of Trade respectfully suggest to the Government ito collect directly from the manufacturer or from the importer, at the port of entry, as the case may be, (the taxes on sales and on luxuries. They suggest moreover to the Government to increase from 1 to 2 or 3 per cent the special duty on sales if it has reason to believe that the tax of the 1 per cent collected from the manufacturer alone will not bring sufficient revenue.
[Stage Direction]
By collecting the tax on sales and on luxuries at the source of supply, or at the port of entry, as the case may be, the said duties will then strike equally every class of buyer, the collection will certainly be more efficient, and trade will not be paralyzed by the impediment and the costly annoyance of a supplementary staff of clerks and accountants.
Certified copy.
[Stage Direction]
Secretary.
The Retailers' lAssociatkin of Quebec has also sent a resolution in which the same principle is enunciated. It reads:
Quebec, May 27, 1920.
At a general meeting of the Retail Merchants' Association, specially called to consider how the retail merchants will fare following the Imposition of a Federal Government tax on g-oods called luxuries, the following resolution was adopted unanimously:
After having studied this important question affecting seriously the retail trade and considering everything carefully and realizing the duty of every one to help this Government make good Canada's financial obligations, and animated by the best of dispositions, the Retail Merchants' Association respectfully suggest the following amendments to the proposals contained in the various resolutions of the Minister of Finance of Canada, and which are just now before the House of Commons.
Whereas there are over 50® retail merchants for every manufacturer, wholesaler or jobber, the luxury tax should be collected by them and charged to tire retail merchants when they make their purchases from the manufacturer. This system would he less cumbersome, doing away with a lot of accounting and would imply less collection expenses for the Government and be easily the surest way to obtain the best results from taxation.
In the event of the Minister of Finance not granting the above suggestions, that the following changes he made on the maximum fixed prices:
No tax on muffs not exceeding $35; from $35 to $125, 10 per cent; over $125, 2i0 per cent. No tax on neckpieces and scarfs not exceeding $50/; from $60 to $150, 10 per cent; over $150, 20 per cent.
That the prices fixed by the existing law should be made higher with the object of facilitating taxation on luxuries. We suggest that the prices should be as fo! lows:
Shoes (with the exception of working
shoes)	$12.00	instead of	$9.00Men's hats	. . 8.00	5.00Claps, men's and boys'	. . 3.00	2.00Siilk socks for men. .	. . 2.00	1.00Neckties	. . 2.00	1.50Mufflers and scarfs. .	. . 5.00	" .	1.50Suits	. .60.00	45.00Coats and cloaks (men's	and women's) . . . .	. .70.00	45.00Shirts	. 4.5-0	3.00Silk stockings for women. 3.50	2.00Smoking jackets and	dressing gowns. . . .	.12.00	3 00Gloves (without fur)	. 4.50	3.00Dresses and gowns. .	. -S'.oi. 0 0	45.00Ladies' suits	.70.00	60.00Fur coats	100.00

Velvet and silks, from. .$2.00 per yard.
Lace	25-
Ribbon	50
That patent medicines are not luxuries, hut in the contrary are of first, necessity for the poor who are stick and for the working class. Patent medicines should not be subject to a luxury tax.
As stated in that resolution there are more than five hundred retailers for every manufacturer or wholesaler. There is no doubt that it would be a much simpler, much fairer and more practicable method of collecting those taxes if they were collected from the manufacturers or importers rather than from the retailers. In addition to that, there are in the country districts small traders who do not keep books, or only to a very limited extent, and there are peddlers who go from township to township selling to the farmers. I would like to know how the tax is to he collected from these peddlers? Most obviously these people will have all opportunities to evade this taxation. I think the representations of the Quebec Board of Trade are fair and just, and that it would be much better to collect these taxes at the source, viz., from the manufacturer or importer. I would like to know what are the reasons for the contrary, for the Minister of Finance has not yet given any argument against this mode of collection which is favoured by so many people?
Upon Sir Henry Drayton and Mr. Foster rising at the same time.
Georges Henri Boivin: Mr. Foster has the floor?


George Eulas Foster: I will yield to the Minister of Finance.
Sir HENRY DRAYTON; I think my hon. friend from Quebec East (Mr. Lapointe) was probably out of the -Chamber when this matter was discussed before. The reasons why the obviously easy method of collection was not adopted are; First, it was -felt that taking the tax from the manufacturer and from -the wholesaler, Tather than from the retailer, directly added to the high cost of living; and, second, the purchaser would not know he was paying the tax in connection with any article he might happen -to buy. For example, if he bought boots of a certain quality he would not know that he was- paying a tax on those boots. He would not know, if he bought less expensive boots that not only was he saving money but he was also escaping the tax. That the tax be put on at the source is really what the Board of Trade of Quebec suggests,-as I

gathered from the resolution which the hon. member kindly allowed me to read. Although I could not quite .follow it in all its details, it seemed to me that their idea was that the tax in each case should be collected at its source. Now, our experience has been that if you collect it at its source, not only is the tax passed on but a large profit on top of it. Let me illustrate. We put a tax on cigarettes-, following exactly the line of action that is now proposed by hon. gentlemen. That tax was only three cents, but because .it was put on at the source, instead of being collected by the retailer from the purchaser, ten cents additional had to be paid by the purchaser for every package of cigarettes he bought. Instead of increasing the high cost of living we would like, if possible, to reduce that cost; and we know that if the tax is put on at the source, instead of being paid by the purchaser at the time he buys an article, these taxes will tend to inflate rather than to reduce the high cost of living.


Mr. EULER:: Could the minister explain why he adopts this principle in some cases and not in others? For example I quoted this afternoon the matter of phonographs, pianos and musical instruments in general, and I might have added other things such as chewing gum, candy, confectionery and cameras. Why does the minister collect at the source the tax on these articles while pursuing a different policy in other cases. If it is a good plan to follow in the one instance one would think it would be a good plan to adopt in the other.


Henry Lumley Drayton: The hon. member's question is a perfectly proper one. But he will agree with me that there is a difference in respect to the articles themselves. There are things you have to have; there are things you can get along without. Now with respect to things you can get along without you obviously adopt the easy method which is going to get you your money without trouble. Pianos and other music'al instruments, candy and chewing gum are not essential.


An hon. MEMBER:: Automobiles.


Henry Lumley Drayton: In the same way automobiles are not essential, so we have taxed them at the source. They are things which people can get along pretty well without if they want to, and they are taxed at the source. But when you come down to essential things such as boots, clothing and the like, the situation is entirely different. Now it may
be that we have not sufficiently observed that principle throughout this list of commodities. I would suggest, however, to hon. gentlemen that in considering the question of the incidence of the tax the distinction should always be borne in mind. If in these proposals we have not kept these distinctions properly in mind I think we should do so. The broad, general principle which we are trying to get at is this:	To raise
money in the easiest way, if you like when the raising of the money in that way is not adding to the inescapable cost of living; but when you have to raise money out of articles which are essential we think there should be no added profit placed on those articles.. We think that the man who buys should know he can get an essential without paying any tax at all; and that he should have the option of paying a tax for the more expensive articles if he likes, and should then pay that tax without any added profit-either to the manufacturer, to the wholesaler or to the retailer-on that tax.


Andrew Ross McMaster: Might I just say a
word in reply to the argument advanced by the Minister of Finance?	.


Georges Henri Boivin: Mr. Foster, who a few minutes ago gave way to the minister, has the floor.


George Eulas Foster: We know the tremendous debt which has been created in this country by reason of the war, and that we must of necessity seek fresh channels for getting a revenue to meet the demands icif that debt. W|s also know that some of the Government's taxation proposals have created a tremendous feeling. Nevertheless, in spite of that feeling, the Minister of Finance must do his duty and collect, if possible, the necessary Revenue. Fob. my part I do not entirely concur in his methods of raising revenue. The minister has modified his Budget to sicime extent in regard to the excess taxes on certain lines of business and this no doubt will be appreciated by many merchants, but in taking this action has he not created a prejudice in the minds of merchants engaged in other lines of business, for naturally they will feel that they too should be granted a -similar concession and should pay tax only upon the excess price? I think the minister's action is not popular.
It has been suggested by the retail merchants that as there are only 8,000 -manufacturers and wholesalers in this Dominion the collection of the luxury tax might be confined to them, in preference to spreading
.1460

the collection over some 200,000 retail merchants. By imposing the collection of this tax on the retailer the minister has created a distinct hardship, and any hon. member who has been in the retail business will readily appreciate what I say. The majority of retail merchants are not in a large way of business, and many of the smaller merchants run their stores with very litttle help. But by imposing on them the duty of collecting this sale tax you oblige them to employ extra help to keep track of this collection, and those merchants cannot afford the extra expense. The result will be that thousands of them will he forced out of business and their trade will fall into the hands of the larger merchants, who will, and can, take advantage of the public in many ways that are impossible to the smaller dealer. It is a material advantage to many small consumers to be able to do business with these smaller stores, and I have noticed that in many cases their lower overhead expenses enable the small retailers to dispose of their goods to the public at more favourable' prices to the consumer than the same goods can be bought for from the larger dealers and the departmental stores. It is apparent therefore thait one tendency of collecting this sales tax from the retailer will be a restriction of the retail business to the larger retail stores and the departmental stores. The latter have a decided advantage already over their small competitors, for they are able to buy in large volume and their quick turnover enables them to sell at a very small margin of profit.
I think the minister should give this part of his Budget proposals very serious consideration, and if he will take into his confidence some of these small retail merchants I am sure they will be able to convince him of the necessity of shifting *the collection of this sales tax onto the manufacturers and wholesalers. The latter can very well place the amount of the fax on the price of their goods, so that the retailer will not have to tell his customers that he has no set price, but that it varies according to the amount of war tax any particular line of goods has to bear. As things are, the public will blame the retail merchant, not the Government, simply because they d<o not understand the situation. By making the change. I suggest a great hardship would be removed from these 200,000 retail merchants as well as their customers, and no disadvantage would accrue to the Government, because there can be no doubt that the collection from the manufacturers

and wholesalers will be absolutely effective and will bring in to the treasury the maximum amount of revenue at a much lower cost of collection.
Through the imposition of this sales tax the Government is the most unpopular that Canada has had since Confederation. It is unpopular because of the composition of the Cabinet and because of its doing the wrong thing at the wrong time. It has shown much extravagance at a time "when there should be rigid economy. 'The Budget and the [DOT] method of collecting these new taxes will I am afraid, wreck this Government unless modifications are made in time. The unpopularity of the Minister of Finance and of his colleagues is going to create trouble, and it is just as well that we should talk plainly and warn the Government in time before it gets on the rocks. We know from the large deputations coming to Ottawa that our business men generally are dissatisfied with the excise and sales taxes, and by this time surely the minister ought to be convinced that, some other method should be adopted which will bring into' the treasury a revenue equal to the amount that he hopes to get under this system and at a much less cost.
The biscuit manufacturers have made representations to the members of this House and to the Government against the imposition of a special tax on sugar-coated or powdered biscuits, which will affect only a part of the biscuit industry. It may seem a small matter, but to the biscuit manufacturers it is of great importance, and they say that if the tax is enforced it will throw hundreds of their employees out of work. They have suggested, and I think it is a reasonable suggestion, that instead of confining this tax to a particular line of biscuits it should be applied to all .sweet biscuits, so that there would be no discrimination against certain manufacturers, and at the same time a larger revenue would accrue to the treasury.
Then we have the manufacturers of musical instruments who have made representations to the minister in regard to the manner in which their business will be prejudiced by some of his proposals. Already in Toronto two large musical instrument factories have been closed down. There are hundreds of men out of employment to-day on account of the Government adopting this method of collecting the revenue. The exemption	is up	to $200, but to
limit, it to that will mean the manufacture of a very cheap instrument of much inferior quality and of less

service to the public. If the exemption were increased up to $400 a far superior instrument would be manufactured. It is contended that any piano costing more than $200 is a luxury. I do not consider a piano a luxury, but a necessity, in the homes of the working people. Every member of this House who has visited the homes of working people of this country knows that ninety per cent of them have musical instruments in their homes, either a piano, an organ or some other instrument. I have known many families with three, four and five partly-grown children spending the most entertaining part of their lives in enjoying music in their homes. Take the music away from their homes, and what becomes of these young boys and girls? We all know how music charms and how a musical evening will keep young people home. All of us who have heard the excellent music at a church service or at public gatherings know how soothing it is. How we all praise it! I say that if you take music out of the homes of the working people, these four or five half-grown children without that attraction in the home will go out and spend the evening in the streets and at cheap picture shows and other places that do not tend to the moral welfare of the family so much as having a gathering of the neighbour's children and your own at a musical evening in the home. I trust that the minister will take into consideration the advisability of making some change in this tax. If he goes on as he proposes to do, he will drive the manufacturers out of business, and therefore he will have no opportunity of collecting this revenue. It might result in cheaper instruments being manufactured, but that would be a disadvantage to the people. I trust, therefore, that the minister will raise the exemption to not less than $400, so that he will not drive out of Ontario and the city of Toronto the working men who are engaged in these industries.
The Electrical Supply people have also put forward very strong arguments why they should not be taxed 20 per cent. I do "not know whether the minister has been convinced by their arguments, but I certainly sympathize with these people as well as with other manufacturers. The poor man who has built his home must equip it with electrical fixtures, especially in the large cities where electricity is supplied so cheaply and where it is such a convenience to the householder. This tax will mean that the electrical fixtures for the ordinary home will cost from $30 to $35 extra. Now, that is a very great hardship on a poor man, and he
will have to go back to the old antiquated method of lighting by gas or candle. We should help the working men to progress, not go back. This Government should assist these people to get the modern methods of lighting in their homes, rather than impose this tax upon electrical fixtures.
The fur manufacturers have also put forward very strong arguments. We know how necessary it is in this northern country to have furs for our comfort in winter. Last year we had a severe winter of four or five months. What a hardship this taxing of furs will be to the people of this country who need furs in winter time. This is another matter which should be given serious consideration. It concerns raw materials produced in our own country, and I trust the minister will reconsider the tax he has imposed on these articles.
The Minister of Finance remarked that we must conscript [DOT] the business men of Canada to collect the excise and sales taxes for the Government. It is one thing to conscript them, and another to get results. The Government has had experience of conscription in the past, and I think this latest form of conscription will be just as unpopular. The minister should have got away from that method, but if he must conscript the business men of this country he should have required only the manufacturers and the wholesalers, not the retailers, to collect the tax.
Here is another instance of the tremendous effect these taxes are going to have on industry and the development of our country:
The Canadian Columbia Graphophone Co., Limited, which, in good faith, believing that Canada offered ideal conditions for the manufacture of grafonolas, graphophones and records, bought the plant of the Canadian Aeroplanes, Limited, located in Toronto, on Dufferin and Lappen streets, which occupies 235,000' feet of floor space, for $600,000, paying Canadian people this money.
They are spending $2,000,000 on an equipment ; and were planning to spend $3,000,000 for. materials, when, like a bolt from the blue, came the announcement of the removal of the 7 j per cent special import tax, and the imposition of an excise tax, that, when examined, clearly defined all the instruments and articles produced by the Canadian Columbia Grapho-phone Company as luxuries, thereby handicapping the firm by an excise tax of 20 per cent.
Realize what this means!
This great Canadian undertaking is halted to see what will be done.
Orders have been cancelled for thousands of instruments, and labour is being laid off; and a great Canadian plant, which would soon have been in full blast, giving employment to 4,000 people and a living to 10,000 people, with a pay roll of $120,000 per week, or $6,000,000 per year, held up indefinitely, and Canada, the


William Daum Euler: 
Mr. BALDWIN:: If I am any judge of the arguments that have been advanced, the hon. member for Algoma East (Mr. Nicholson), the hon. member for Brantford (Mr. Cockshutt), and the hon. member for Beauce (Mr. Bel and) gave the best evidence that I have heard in this House why this tax should not be collected from the retailer. There are, let us say, 200,000 retail merchants in this vast country, more than half of whom are very small traders keeping general stores. Probably 50 per cent of them are endowed with keen minds, but are deficient in bookkeeping. I have been in trade for forty yeaTS, and I know something of what the small country store is. There might not be in such a store any article that will be taxable with, perhaps, the exception of ribbons. The hon. member for Beauce (Mr. Belan-d) mentioned that the sale of a yard of ribbon costing fifteen cents will compel a merchant to make out a monthly report for a cent and a half. That will he a great effort for the merchant, and the Government will secure very little revenue.
There are ways of avoiding this tax. Who is going to collect the tax from the pack-pedlars, the one-horse pedlars, the four-horse pedlars, who are going throughout the country now selling clothes, shoes and other commodities and who do not pay anything for the upkeep of schools, even for the upkeep of the roads on which they travel?
There is another person who
9 p.m. will endeavour to evade this tax. I refer to the favoured few. The wealthy person will go past the retailer down to the wholesaler or manufacturer and will purchase expensive goods there. It can be proved to-day that in the city of Toronto a lady was seen in a wholesale drygoods store buying large quantities of silk by the yard.
Let ua see how this tax will affect those
200,000	retailers if they have to make monthly reports. I will ask the minister if this report is supposed to be made at the end or the beginning of every month? The minister gives me no answer. I say, Mr. Chairman, that the collection of the tax in the way the minister proposes will necessitate the employment of an army of clerks in Ottawa and the amount of revenue that will be derived from these retail merchants will not be enough to pay the expenses in connection with the auditing of the accounts. This is going to add thousands of employees to the Civil Service, to say nothing of the enormous scale on which- evasion will be practised. I see that the minister is not paying very much attention to the discussion and I suppose it does not amount to much, so far as he is concerned. Let us consider what a vast number of clerks it will take to audit these two hundred thousand monthly accounts, and we can easily form some idea as to the expense the collection of -this tax will involve. Do you imagine for a moment that fifty per cent of these people will contribute enough to the treasury to pay the clerks who will he engaged in auditing the accounts? The minister's colleague, the Minister of Marine (Mr. Ballantyne), has built up a business, and he must know that what we need in business more than anything else is to see that our revenue is not eaten up by overhead expenses. The hon. member for North Oxford (Mr. Nesbitt) referred the other night to retail merchants doing business of $l,O00-odd a -day. Why, -Sir, apart from the large departmental stores in Canada, there are-not a score of merchants in the country who do business of such dimensions. Indeed, many merchants Ido no more than a thousand dollars' worth of business a month, and they handle everything from a needle to an anchor, including grindstones. I can only see a mass of trouble ahead of the minister if he is going to collect the taxes in this way. Every wholesale house throughout the -country has a good accounting system. It keeps a bookkeeper Who has a perfect system of accounting, and it is in every way equipped to keep every sort of record. And the importer has a bonded warehouse and can easily add the taxation to his invoice. In this way you would get -your money in a lump sum, and while it would be considerable its collection would require only one-tenth of the time and clerical work on the part



of the civil servants which would he necessary if the proposed system is followed.
I would suggest to the minister also to lower the valuation of the goods on the manufacturers and importers say 25 per cent more than oil the retailer; and possibly there might be exemptions in regard to goods going to hospitals. I have listened attentively to all that has been said in the discussion of this subject and I have so far failed to hear one argument that really justifies the minister's proposal in regard to the collection of the taxes. The minister says that we need money. We all know that, and1 I do not think that any one has attempted to gainsay the fact. I have not heard any one advancing the argument that there should not be a system of taxation. Matters of detail may have been discussed, but I have not heard any one contend that we do not need to raise money. But the question in dispute is as to the method of collecting that money, and I say that if this proposed system of collection is put into operation it will be the greatest mistake ever perpetrated in this country. I was told that a lady went into a store to buy a $12 hat, but when the merchant said that she had to pay $1.20 upon it she declined to have it; and the same thing applies to shoes and boots.
Now, Mr. Chairman, the minister should realize that it is important to have retail merchants throughout the country, because people will not be induced to go into back settlements unless they know that there are stores in those places where they can obtain their necessities; therefore' nothing should be done to hamper those merchants. When the Act was passed imposing on certain merchants the obligation of affixing stamps by way of duty to the goods they sold, a great deal of trouble resulted and there was a great attempt on the part of many people throughout the country to evade the law. Now this is a monstrous mistake and the minister would de well to consider the representations that have been made to him before putting his proposal into effect. The retail merchant is prepared to bear his share of the burden, but this system will entail a considerable hardship on him. As I have said, it will require a tremendous overhead expenditure to collect this tax. As the hon. member for North Waterloo (Mr. Euler) has pointed out, the retailers of the country, under this proposed scheme, would virtually be in the employ of the Government, doing work for which they would not be paid, and you could not blame them for being antagonistic to such a proposal. If the minister is anxious to put

money into the treasury, let him impose a tax on the manufacturer and the importer, and that will cover all. But this is a most stupendous and stupid piece of business, for the reason that the overhead1 expenses in-the collection of the tax will consume all the revenue derived.


William Stevens Fielding: If the minister has
definitely made up his mind to adhere to this method of collecting, I do not suppose that it is of much use to discuss the matter further. But if as he said this afternoon -and I commend him for the expression- he is still keeping an open mind to learn whatever can be learned, I respectfully say that I hope that even yet he will reconsider this matter. It seems to me that the arguments that have been advanced in favour of the present system are not strong, while the arguments in support of a different system appear to me to be almost unanswerable. There is one reason my 'hon. friend might advance for his present system; I wonder if it has been in the back of his head all the time and he has been too bashful to express it. If he collects this tax at the source, the source being either the manufacturer, the wholesaler or possibly the importer,-at all events the wholesaler,-he will not get the tax once but under the system that he is adopting he is going to get the tax at least three or four times. He can multiply this tax to the consumer. For my hon. friend to argue that by this system he is going to prevent an increase in the cost of living is quite beyond my comprehension. I think it is entirely a mistake on his part. Let us take an illustration. Suppose a large manufacturer is about to sell $400 or $500 worth of high class goods to a wholesaler. Of course, the tax is not imposed on the whole value of the goods. The tax is only on the excess and' it is only the excess that we are now taking into account. That excess will be, say, $100-it is possible that on goods of a value of $400 or $500 there will be $100 of excess. On that excess there will be a tax of $15 when the wholesaler buys the goods. There is a tax on the profits piling up all the time but we need not stop to consider that because that is something that is created by the tax. The wholesaler pays $115 for the taxable portion of the goods. Adding to that his profit before he sells to anybody else he will sell at an advance, I will say, at the moderate rate of ten per cent. That ten per cent enters into the selling price and it is on the selling price that you are levying the tax. The wholesaler will sell those goods at $115 plus

a profit, and the tax, when the goods get into the hands of the retailer, will toe at least $17.25. Thus the goods pass to the retailer. The retailer also gets his profit, and he fixes his selling price after he has added his profit. You will find that in that transaction on goods passing only through three hands-it may be through four by including the jobber-under your system, you will collect at least three taxes. But, instead of getting 15 per cent as my hon. friend proposes, the tax on these goods, passing through the hands of these three different parties, will amount to about 60 per cent, and if you put the jobber in between the manufacturer and the wholesaler, instead of that parcel of goods paying 15 per cent, it pays nearly 100 per cent into the treasury. If my hon.	friend w'ants
to get the money in that	way, I
admit at once that he	is going to
get it by collecting three or four taxes instead of one. And it all comes down in the end to the consumer. Does any one imagine for a moment that the manufacturer, the wholesaler or the retailer is going to pay that tax without adding it to his price? What was urged by so many hon. members here to-day, what was urged by the French Chamber of Commerce of Montreal in the resolution that I presented last night, what was urged by the Quebec Board of Trade in the' resolution read to-day by the hon. member for Quebec East (Mr. Lapointe), what was urged by the hon. member for North Waterloo (Mr.' Euler) and by the hon. member for Stanstead (Mr. Baldwin) are all arguments why the tax should be levied at' the source. I admit that if my hon. friend adopts that plan he will only get the tax once, but if he says frankly that he wants to get it three or four times I can understand what he is driving at. If that is his idea, do not ask the people to believe that they are only paying 15 per cent when they are paying 60 or 70 per cent and possibly even more. I believe that is a mistake. If my hon. friend says that he has ito have it, that is an argument that is understandable.
My hon. friend from Standstead . (Mr. Baldwin) has not exaggerated the case when he speaks of the irritation, worry and unnecessary expenditure that will be caused to retailers by the system which my hon. friend proposes. I do not want to dwell on the situation longer. It seems to me that there is everything to be said in favour of direct taxation at the source unless my hon. friend says that he cannot 220*
get enough at the source and "hat he must get it over and over again in order to get his revenue. But he has not put it on that ground and I do respectfully ask him before this Bill is finally through to give consideration to the views'which have been so strongly expressed to-night by hon. members of this House.


Henry Lumley Drayton: I would like
very much to be able to follow the argument of my hon. friend (Mr. Fielding), but I confess that I am at a loss. I dare say that it may be entirely my own fault. I know he will bear with me because I desire to fully comprehend the different positions that are taken. After all, the great thing to do is_ to try and get at the right thing in connection with this whole question. My hon. friend starts at the source with a 15 per cent tax, he runs it down from the manufacturer or importer, to the wholesaler, jobber and retailer; and instead of it being a 15 per cent tax, the hon. gentleman says it will be more like 60 per cent. I would have appreciated that argument if my hon. friend had been arguing in favour of the proposal which has been brought down because precisely what my hon. friend says, is what would happen if we did tax at the source. It is pyramiding that my hon. friend speaks of, and I am not saying that he is not right in illustrating it. But you cannot pyramid unless you go back to the source. If you take the very last transaction, there is no room for pyramiding. I do not want to get that 60 per cent. I do, not want to multiply taxes in the name of a, single tax. As I understand it-I may be-entirely wrong-there is no way of working-[DOT]the tax back from the retailer to the jobber or the wholesaler or the manufacturer. The transaction is concluded with the retailer; it is finished; it is done. It commences and ends in that one single transaction. But, on the other hand, if it commences at the source and works down to all the different forms, my hon. friend is absolutely correct; it does multiply.


William Stevens Fielding: Under the system proposed by various speakers of taxing at the source, my hon. friend would get one tax in connection with that transaction on $100. Under the system he proposes he will get four taxes, or at least three. There is- no dispute about that, is there?


Henry Lumley Drayton: That is where
I do not follow my hon. friend.


William Stevens Fielding: Each one of -these
transactions pays the tax?


Henry Lumley Drayton: No.


William Stevens Fielding: Yes.


Henry Lumley Drayton: Not with the
luxury tax.


William Stevens Fielding: I am only dealing with the excess. I take a parcel of boots or shoes worth $400 or $500 of which $100 is excess. Of the value of that whole parcel you take $100 on which the (tax is levied. When the manufacturer sells to the wholesaler there is a tax of 15 per cent, but when the wholesaler sells to the retailer there is another tax paid. When the reitailer sells to the public, there is another tax paid. Am I right in that?


Henry Lumley Drayton: My hon. friend ia wrong. I quite understand how the mistake occurred. Just at present we are only talking of this so-called luxury tax.


William Stevens Fielding: Boots and shoes.


Henry Lumley Drayton: Quite so, fifteen per cent on the excess over the prices fixed. Now there is only the one tax paid under the proposition made by the Budget, because the tax only commences when the sale ends, with the retailer. There is nothing else.


Andrew Ross McMaster: It doesn't say so, does it?


Henry Lumley Drayton: 1 think it does say so.


Michael Clark: What about the one per cent?
.Sir HENRY DRAYTON: Now we are getting to another question entirely. The one per cent tax is entirely different from the taxes we are now discussing.


William Duff: Not at all.


Henry Lumley Drayton: An hon. gentleman says "not at all" I would ask that hon. gentleman-


William Duff: The one per cent is added to the price.


Henry Lumley Drayton: I think, Mr. Chairman, we had really better try to stick to one resolution at a time. We are having a great deal of difficulty in dealing with that one resolution, long as it is, and we will have very much greater difficulty if we run into others. There is nothing in this resolution as to the one per cent tax. It does not touch this question at all; hut to the extent that it does touch it, you multiply taxes if you bring taxes back to the source. It is perfectly true, with respect to the one per cent, that although there is a provision that 
tax shall not be brought into, the ordinary costs of the manufacturer, it is cost to the wholesaler and it is cost to the jobber-you cannot get away from it.


William Duff: What about the'cost to the retailer?


Henry Lumley Drayton: To the extent
that it is cost to the wholesaler and cost to the jobber it is an item on which some profit will undoubtedly be charged. That being so-and. I do not think there can be any room for debate about ifi-the other incident is also true: That if you carried back this fifteen per cent to where you start with your one per cent you get the exact, result described by my hon. friend (Mr. Fielding). We hav,e absolutely only the one tax on luxuries. It is true wre have a multiple of taxes on sales on the one per cent; we have got our one per cent from the manufacturer, and we have got bur one per cent, from the wholesaler; and in effect what is- asked -when it is suggested that we should change the species of taxation-is to take this fifteen per cent and place it first where the first of the one per cent commences, having the exact effect the hon. gentleman has pointed out. But we do not want that. That is one reason why, so far, we have not attempted to go away from the tax on the retailer, because the results pointed out by the hon. gentleman would follow.


Michael Clark: What about
the expense of collection in the two cases?


Henry Lumley Drayton: There I agree
with my hon. friend we w7ould save, absolutely save money on taxing the source. It is just a question which is the right thing to do.


Andrew Ross McMaster: Might I point this
out to the minister: It seems to me what the hon. member (Mr. Fielding) has said was due to the fact that he did not realize -I did not realize myself-the signification of the wordfe "when sold separately" found in the concluding line of the first resolution before the subsections appear. But that is hardly as clear as it might be. I think you should say "when sold separately to the ultimate consumer". For instance, if you take a very expensive fur garment- I understand there are some fur garments sold at a price as high as. $20,000-you could easily imagine -that one of these would be sold separately by a wholesaler to a retailer, and then there would be ten per cent or $2,000 collected. The retailer might sell that garment again and then

there would be-even under the wording of this clause- another $2,000 added and the argument of the hon. member (Mr. Fielding) would absolutely fit the case. The hon. member for Macdonald (Mr. Henders) shakes his head; I think he is wrong and that I am right. The wording of the clause is:
That the following excise taxes he Imposed, levied and collected on the total purchase price of the articles hereinafter specified, and on articles of clothing the said tax may be Imposed upon the combined selling price of materials and cost of manufacture when sold separately.
Now let us take my. fine fur garment costing $20,000. Such garments are probably not often bought in the West, except perhaps in Winnipeg, but they are sold sometimes in Montreal. Now I can imagine a fur manufacturer selling a $20,000 garment to a wholesaler, and on that sale he would charge $2,000, that is to say the wholesaler buying from the manufacturer would have to pay $2,000 on the purchase.


Mr. CHAPLIN:: At what rate would that
be?


Andrew Ross McMaster: At the rate of ten per cent. I will quite frankly say that I am taking an extreme case for the purpose of making my .argument perfectly clear. Now when the fur manufacturer sells to the wholesaler, on that sale the wholesaler will have to pay $2,000, that is ten per cent in addition.


Henry Lumley Drayton: Would the hon. member allow me one moment-because I know that he does not wish to pursue a phantom? There is no luxury tax whatever against the wholesaler, absolutely none, and if the hon. gentleman would take the trouble to read section No. 2 also, any possible doubt which might be conjured up by a very astute lawyer like my learned friend is set at rest entirely. The luxury taxes are only on sales foT consumption.


William Stevens Fielding: On the retailer only?


Henry Lumley Drayton: On the retailer only or the sale by the retailer to the public. "Every sale for the purpose of consumption or use." It is exactly the wording of the section. Let me read it:
That the excise taxes as imposed by the preceding resolution shall be paid by the purchaser to the vendor at the time of sale for consumption or use, or on importation for consumption or use other than for re-sale-
There is no thought of putting a luxury tax on the wholesaler.


William Stevens Fielding: In that clause the words, "for consumption or use'' appear. If it means that, all I can say is that one part, of my criticism is defective. There are two objections to what the hon. member proposes: One is the annoyance, irritation and trouble that will result. The other is the increase, as I thought it was, in the tax, and I think my hon. friend has not made it clear, if he means that. The expression, "for consumption" when used in the customs law means when a man takes an article out of the customs house into the warehouse. I think he will need to make that part of the resolution clear because there is a widespread opinion that "consumption" is not limited to the act of the retailer.


Henry Lumley Drayton: If I may be allowed one minute. I want to make that just as clear as hon. gentlemen desire. We ought not to have any dispute about it that "consumption or use" is consumption or use by the purchaser. In order to make the thing absolutely clear the words, "other than re-sale" are added. If there is anything further that hon. members desire to add to make it perfectly clear that we are only asking and only proposing to take the one tax I will be very glad to add it.


Mr. CAHILL:: What is the minister reading from?


Henry Lumley Drayton: I am reading from the second resolution at page 34.


Frank S. Cahill: I find that under this excise tax ten per cent will also be payable at the time of the sale by the Canadian manufacturer in respect to such things as fur garments, and so on. 'Is that still in operation?	.


Henry Lumley Drayton: That is entirely different, as was pointed out by the hon. member for Waterloo (Mr. Euler). There are two different kinds of taxes here, some of which are brought back to the source, to which it was felt they could be brought back without real public injury and without raising the cost of living in relation to essentials. That stands, in connection with those items; it never had the slightest application to the items we are noiw discussing-boots and shoes, etc.


Willis Keith Baldwin: If it is implied that no tax has been charged by the wholesaler since the 19th day of May, I may state that any wholesale merchant from whom I have purchased goods has charged the one per cent on the total amount of the invoice.


Henry Lumley Drayton: That is just exactly what I say: the one per cent sales tax. At present we are discussing the luxury tax.


Isaac Ellis Pedlow: I submit that there is a difficulty where the manufacturer is also the retailer, and it should be cleared up right now. It is a discrimination against the retailer. If the manufacturer has the right to sell direct, to the consumer-for instance, we will say a manufacturer of furs-I contend that he should at least pay the one per cent manufacturers' tax and the ten per cent luxury tax.


Henry Lumley Drayton: Quite right.


Isaac Ellis Pedlow: That is the difficulty the member for Brome (Mr. McMaster) referred to.
Mr. J. (E. FONTAINE (Hull) (Translation) : Mr. Speaker, I have no intention of detaining the House very long; yet, taxation being levied upon necessaries of life, taxation- which caused such tan upheaval throughout this country and was the occasion for such loud protests, I -feel it to be my duty -to offer some observations on behalf of the constituents I have the privilege of representing.
There is in the city of Hull a retailers' association, a most important organization of which our foremost merchants are members, which last night, at a special meeting, passed a resolution in condemnation of the method advocated by the Government for the levying of taxation. I was confident that, -having altered the system of taxation as to -some commodities, the hon. Minister of Finance would agree to change the method df gathering those taxes.
The retail merchants lare rightfully complaining about the trouble and expenses it is going to entail to them. To my mind, it would be fairer -to have those taxes collected at the fountain head, from the manufacturer. A few moments ago, T heard the hon. Minister of Finance state that certain commodities would be taxed at the very fount olf production because they are not necessaries of life, for instance, pianos, phonographs, and so forth. Mr. Chairman, it seems to me that such articles as cut glass, velvet, silk, laces, are not essentials, and yet the hon. Minister of Finance will cause the retail merchant to collect the tax upon them. His reason for so doing is by no means conclusive, since in- the case of patent medicines which, far from being luxuries, are absolutely necessary, he has the tax oollected from the manufacturing establishment itself.

I think that the Government .ought to grant the request of all the retailers of this country. After all, Mr. Chairman, it cannot 'be out of stubbornness that this association aisk that the burden of collecting these taxes should not rest upon them. As it was said by many hon. members who spoke before me, it might favour fraud" and force the consumer to pay higher prices for, say what you may, it will always be an easy thing to humbug him.
Once again I wish to act tas the spokesman of the Association of Retail Merchants of Hull who have requested me to place their case before the House; I do so with pleasure and I ask the -hon. minister, in their name and in the name of all the citizens of this country, to give -heed to their representations and to find a way for collecting these taxes which will not be -such a heavy burden on the retailer. If the tax were collected from the manufacturer 15 or 20 per cent would be added to the price of the goods and the tax thus paid by the wholesaler iat the time of his purchase; he in turn would include the tax in the price of the goods when selling them to the retailer. Of course, in the long run, the consumer would pay the duty, but he would not notice it, and besides the retail merchant would be relieved of all this load of responsibility.
Mr. Chairman, I humbly submit that the hon. minister should accede to the requests of the many hon. members, who are only voicing the sentiments of the country when they aek that a different system be devised for the collection of this tax. We are not criticising the tax itself at the present time; we understand that it must be imposed, that it is absolutely necessary as things stand to-day; however, it is unfortunate that the Government should have led the country into this position-I understand that -this question cannot be discussed in committee. Besides I mentioned this in my speech on the Budget, when I reproached the Government with having put us in a position where the imposition of these taxes is a matter of necessity. I-f there had been more economy, less extravagance, less scandal, we would not find o/urselves in this position to-day; however, since the thing is done, II think the Government should at least do its utmost not to make things so hard for certain classes of the community and not to overburden the retail merchants whose time must be given entirely to their business and who should not be forced by the Gov-

eminent to act in the capacity of tax collectors.


Mr. COCKSHUTT:: It appears to me that the minister is quite oorreot in his description of the collection of the tax, that is, through the method he proposes it is obviously to be collected only once, and that from the retailer. There can 'be no doubt of that because the words "sold separately" occur in the first clause, and the second clause makes that even more distinct. So I think my hon. friend from Shelburne and' Queen's (Mr. Fielding)-with whom I agree on some other points-is not correct in saying that the tax would be passed on three or four times before the final sale.
I suggest to the minister, however, that I am still very strongly of opinion that it is highly desirable for him to change the mode of collection. I stated that the other day, and when the member for North Oxford (Mr. Nesbitt) challenged me on the point of my proposed change raising the cost of the commodity to the consumer, I said undoubtedly it would, because if the tax is collected at the fountain head it would have to be passed on, and it would be passed on on each invoice. But instead of being, collected from 200,000 people, as is proposed here, the tax would be collected from 7,000 ot 8,000 people. The accounting system of these 7,000 or
8,000	would obviously be accurate, and the department could walk in there and be sure they were getting all that was coming to them, because all these people are almost obliged under the laws of the country to keep an accurate account of every sale, and everything has to be audited by competent men. But these conditions do not obtain with the retailer. As my hon. friend has pointed out, there are tens of thousands of merchants in this country who are not doing $1,000 worth of business- a day, or even a week/ and many of them not even- in a month, and it is unfair and unreasonable in my judgment for the Government to impress 200,000 men into the service of the country to collect taxes for which work they receive no remuneration whatever. They will be put to a very great expense. My hon. friend from North Oxford said $5 would cover it. If he had said $500 he would have been short of the mark, and so far as the large establishments are concerned it will be nearer $5,000. I say it is scarcely right to impress these men all over the country, and some women-for there are women shopkeepers-into the Government service without any remuneration. Further, it puts every one of these vendors into the position of possibly offending their customers, and that is a very undesirable thing. If there is one thing above another that a merchant tries to avoid, it is to offend anybody who is trading with him. He would do almost anything rather than that, because an offended customer means a loss of trade. It is a very unpopular thing to be a tax-collector; that is admitted by all. It is bad enough to pay taxes, but I believe it is worse to collect them. From the abuse I have heard some tax-collectors get around different parts of the country, I am sure their position is no sinecure. The minister has made it clear to my mind that there are some valid reasons why this tax should only be collected once, and if it could be done by the wholesaler I think that is the most desirable way. I admit that if the tax' is collected at the fountain head it will be passed on and the result will be that the customer will pay more than the Government will receive. There is no doubt about that. It is very much like a man buying a barrel of spirits and instead of paying -a duty of $2 a gallon on the forty gallons, collecting the tax over the bar on every glass sold out of that barrel. That is practically the principle the minister proposes to follow. We are going to have 200,000 tax-collectors. The retail merchants, who have gone on record in this respect, have stated that they do not think they should -be impressed into the Government service in this way. They say they are willing to do all that is reasonable, but I submit to the, minister that it is not in accordance with British fair play to impress 200,000 people, who have their living to earn-I was -a merchant for a good many years and I know that they do not get their money any too readily-into the Government Service in this way without any remuneration. These retail merchants lose a great deal that is on their books and some of these luxury taxes will be lost on the books of these firms as soon as they are put on. The Government will also want a statement from every -retailer. Now that cannot be prepared readily. -Some merchants are not expert accountants. In the old days many of them did not keep books so far as cash was concerned. If they had money in the bank and in their pockets they did not worry. The larger establishments, making up about ten or fifteen per cent of -all the stores in the country, have very good accounting systems. That remark, however, does not apply to the average retailer. Therefore, w-e cannot expect them to comply with the requirements of the depart-

ment very readily and without a great deal of trouble and considerable expense. Though by this method I am suggesting the taxpayer would pay a little more, he would pay it without knowing it, but under the njethod proposed by the minister he is going to be confronted with the tax every time he buys. The minister says that that is what he wants. Well, he will certainly bring it home to the buyer, but it will not be very palatable to him. There is many a man who takes a dose without knowing what is in it, and what the results will be, who would have be-sitated to take it if he had known the consequences. It is the same with this tax. -It is going to be unpalatable in its present form, and it is going to be difficult to collect. It is going to put on those who pay the tax into the treasury the obligation of collecting taxes from their clients, whom they want to be their best friends. The minister has expressed himself as having an open mind on this question, and I believe: he has. That benign smile of his shows that he has a very warm spot in his heart for the argument we are putting up. I do not want to use any undue pressure, or to make any threats, or do anything of that sort, but I do appeal to the minister in the interests of the people as a whole, and of the merchants in particular, and their Customers too, to reconsider the method of collecting the tax. I believe my hon. friend from. Red Deer will admit that if a man is paying a tax that he does not know he is paying, it is not half so unpalatable.


Michael Clark: I always know.


William Foster Cockshutt: There are some who do not. I have paid a good many taxes without knowing it, and I say that is the most palatable way to pay them. I submit that in all justice this should have the serious consideration of the minister and the Cabinet. I believe that if they will weigh the pros and cons carefully, they will come to the conclusion that the wholesale method of collecting the tax is better than the retail, and that the smaller the number of people to whom they have to go, the less trouble they will have. These larger firms have accounting systems on which the Government can rely, and they will collect the tax once for all, so far as the Government is concerned at the fountain head, which seems to me the proper place.


Isaac Ellis Pedlow: I am sure the House must be delighted with the minister for bringing 
on this discussion, if for no other reason than to hear the confession of the hon. member for Brantford of his conversion from his protectionist ideas. He has declared himself without doubt and beyond question to-night, and I sincerely trust that he will not have reason to change his attitude on some other occasion. I remember an occasion not long since when he appealed to the former Minister of Finance to "have a heart." To-night he almost looked as if he was asking the present Minister of Finance to "have a heart," though in another direction altogether. I shall not attempt to give the reasons for this.
In the Budget speech the Minister of Finance defined very clearly his attitude in regard to these taxes. In this printed copy of the Budget speech, in the part which the editor has headed "Luxury Taxes" I find this opening sentence,, which is very convincing to me at least:
Not only is more revenue necessary but extravagant and luxurious expenditure ought to be checked. Just so long as expenditure on nonessentials and extravagant expenditure continues, just so much longer will the drop in the value of essentials be postponed. On those having income more than necessary for properly maintaining themselves and families, there rests a special duty of saving whenever possible and in this manner adding to the available financial resources for development and for industrial undertakings. Extravagant buying should stop.
Since these Budget proposals have been brought doum the minister has stated many times in the House and elsewhere that he is prepared to stand or fall by them as introduced. That is the principle of collecting from the retailer on certain specific articles and from the wholesaler on others.
I may say at the outset that I am sorry the minister has taken that stand, because I ivould have preferred a different method of collecting the tax. Just the same, it is my desire that the minister shall get down to business as soon as possible, and it is not my intention to delay the committee very long on the present occasion. I may assure the committee at once that it is my intention to give the minister all assistance necessary in order to put this schedule into workable operation. I want, however, to go on record at the same time as to the method I would suggest if I had the say or if I had been consulted in the matter before it reached this stage.
The hon. member for Shelburne and Queen's (Mr. Fielding) has taken exception to this method, as have also many other speakers who have preceded me in this dis-

cussion. Some of them have claimed that one method would be preferable and some, another, for reasons assigned. I am sorry I cannot see eye to eye with my hon. friend (Mr. Fielding) in the method he suggests, and the same method has been suggested by the hon. member for Brantford (Mr. Coekshutt). The argument will not stand analysis to any great extent. The proposition made by my hon. friend is that the tax shall be collected at the source of supply. Let us see what that means, taking the simple tax of one per cent on sales. I take for my illustration a raw material, say wool. The wool broker imports a quantity of wool, on which quantity he pays to the Government a tax of one per cent, and 'I will take the figure of one dollar. The broker passes that on to the manufacturer, and, of course the broker will charge a reasonable profit on that one per cent tax; he will add it to the price of the material. That means that the manufacturer will pay the broker $1.25 for that one dollar's worth of tax. The manufacturer, of course, will add on one per cent he has to pay to the Government plus his profit. That means $1 on to the $1.25, or $2.25, plus the manufacturer's reasonable profit which will be 56 cents, making a total cost from the manufacturer to the wholesaler of $2.81. The wholesaler adds on his one per cent which goes to the Government, plus his profit, which, on a moderate estimate will be at least 25 per cent, and sometimes it is more 4han that. The wholesaler finds that he has an item of $3.81 to account for, to which he adds his 25 per cent profit, or 95 cents, making a total of $4.76, the cost to the retailer. The retailer in turn will pass that on to his customer with his profit added. I can speak from experience and I know with certainty that the retailer who adds a mere bagatelle of 25 per cent to the cost of his 'commodity-in the case I have assumed that would represent $1.44-will find that an item of one dollar which the broker paid to the Government in the initial stage has risen, through the process of transmission from one stage to another, to the total sum of $6.20 when it reaches the consumer. This, in a nutshell, means that the Government will receive the sum of $3 which amounts to $6.20 by the time it reaches the consumer. In other words, out of $6.20 paid by the consumer for the tax item on the merchandise purchased, the Government will receive only the sum of $3. That is a good argument against collecting the tax back at the source of supply, because if you collect the other tax as well as that at the
source of supply, it will also multiply in geometrical proportion as it goes from one stage to another. I am not, therefore, in favour of this systehi of collection. I know that this system has been endorsed 'by the Retail Merchants Association,
10 p.m. but they are only a body of men who perhaps have not considered this matter as fully as they might have done. A few weeks ago they were in favour of another system, and perhaps tomorrow they will be in favour of a different system from the one selected to-day.
I might say at once that I am in favour of a "tax on turnover" or "a tax on sales," and that would undoubtedly be the ideal system. It would be simple in operation and inexpensive to collect, and it would give the Government the maximum of returns for the minimum cost. Further, the maximum of collections would be received by the Government at the least cost to the consumer.
The proposition as it is before the committee at the present time embodies several systems of collection. The principal method of collection which has engaged so much attention since the Budget was announced was the excise tax collected by the retailer from the consumer; but we have, too, a tax on the total amount of the specific item, also a tax on the amount in excess of a specific amount, and a tax on the total amount of certain specific .articles, as well .as a tax collected by the retailer from the consumer, and a tax collected from the importer or manufacturer on certain other items on the list as the case may be. We have all these systems embodied in this amended resolution; but, notwithstanding all this, the minister has deter-, mined that he is bound to stand or fall by the system; that conclusion he has enunciated before the committee. There is no use wasting any further time with this discussion; but nevertheless, I wish to show further the reasons why I prefer the "sales tax" or tax on "turn-over" to the tax on so-called luxuries and so forth, when collected either from the importer, manufacturer, or retailer.
The United States have had a luxury tax in force during the past year from the first of May last, and their experience should be some guidance to us. I may say that the system adopted by them is somewhat different from that adopted by the Minister of Finance. Their system applies entirely on the amount in excess of a specific amount named in their schedule and their list of items is not nearly as large as the


An hon. MEMBER:: Eight millions.


Isaac Ellis Pedlow: Perhaps it is eight millions, but let us say 10,000,000 for the sake of convenience in calculation. Suppose we took one-tenth of the returns of the United States, we should have a revenue of $619,-
700,000.	So that you can easily see why I am enamoured of a proposition of that kind. It looks to me like easy money, and we all know how earnestly the Minister of Finance has tried to impress on us the need formoney in this country. We do not need his forceful arguments in that respect, however, we need only the facts to convince us that money is an absolute necessity and that the country must have it, and I think the shortest method we can adopt should be the best.


Michael Clark: Would it do for this Government to have so much money to spend?


Isaac Ellis Pedlow: Well, it would be a good thing for the country to have that much money. Now, Mr. Chairman, in looking

over the Budget Speech of the Minister of Finance, I find at page 16 of the report as printed by the department that the revenue anticipated during the current year is $381,000,000 odd; the expenditure is $549,000,000 odd, and the deficit $168,000,000. These are the figures, roughly. They may not be absolutely correct, but that is my reading of them and if I am wrong I trust the minister will correct me. Now that seems to me to present a huge problem for the Government and the country to face, and if we could adopt a system such as is described in the article I have read I could see daylight through the difficulties that are now facing us. I shall not detain the committee much longer, but I desire to refer to one or two of the main objections that have been advanced by some hon. gentlemen. The Minister of Finance has been kind enough to admit that the explanation which I gave to the hon. member for Brome (Mr. McMaster) was correct; that is to say, that where a manufacturer sells direct to a consumer then the tax of one per cent and the excise tax, or whatever else you choose to call it, is paid at the same time. There is another proposition that might be considered in that connection, and I gather from what the Minister of Finance has said that he either has dealt with it or intends to do so. I refer to the case where a manufacturer sells direct to the retailer. In cases of that kind, the retailer who is in a position to buy direct from the manufacturer or import direct from the original sources in the manufacturing centres of the Old Land will be at an advantage of two per cent over the smaller retailers throughout the country. That feature should be considered and attended to. There are a few items in the schedule to which I would call the attention of the minister, and I shall run over them briefly so that the committee may know what they are. I find in the list originally prepared-whether it is correct "or not I am not sure- that the Minister of Finance has placed a tax on ham and bacon while he is placing sausages on the free list. So far as this article of food is concerned, I must say that I differ from Mark Twain. Mark Twain said he liked sausages because he knew what he was eating, and for the same reason I do not like them. I should like to know why the department decided to make sausages free, while taxing ham and bacon. Then I find that baby foods and breakfast foods are taxable, while food for cattle and hogs is free. That seems remarkable. Then there is an amendment in regard to ribbons. Ribbons
are changed and an exemption is provided in that case. He exempts typewriting ribbons.
Mr. McMAjSTER: Will that apply to the ribbons worn by stenographers?


Isaac Ellis Pedlow: I am coming to that. A certain lawyer in the town of Renfrew was going to the city and he made up a list of his requirements^ before he left home. Unfortunately he left his note-book on the dresser and went away without it. His wife discovered it and amongst the entries was "ribbon for typewriter." It is easy to understand that he got in wrong.


Michael Clark: Explain.


Isaac Ellis Pedlow: Perhaps the hon. member for Brome can explain that. I am merely stating a situation that occurred in Renfrew, arid I am sure that lawyers there are not different from lawyers in Montreal or elsewhere. I notice in the amended schedule a great many items that have had the attention of the Minister of Finance since the resolution was first introduced in the House, and which I think require close consideration. Perhaps 1 had better leave those until we come to the several items. I approve of the appeal made by the hon. member for Centre Vancouver (Mr. Stevens), and the hon. member for Strathcona (Mr. Douglas) in regard to hats. That is a matter that deserves the serious attention of the minister. Hats should be classed among the things that are really essential articles of clothing in this country. A man may wear a straw hat like the hon. member for Red Deer (Mr. Clark) and the hon. member for Marquette (Mr. Cre-rar) in summer time, but. these would not be very comfortable on the western plains in winter time. They will want to buy felt hats of a good quality.


Michael Clark: My hon. friend did not find the western plains very comfortable when he went there.


Isaac Ellis Pedlow: I do not know. We left Ottawa in the month of October, in summer weather, when straw hats and light clothing were in vogue, and on our arrival in Assiniboia we got a very warm reception, though there were some chills connected with it. The hon. member for Brome and myself went out there prepared to enter into a warm political contest, but unfortunately we found it was only a family quarrel, and we found wfeat a man generally finds when he engages in a family quarrel; we were up against it on both sides of the House. However, I can assure

my hon. friends from the West that we enjoyed every minute of our experience, notwithstanding the atmosphere that obtained during our sojourn in that country.


Michael Clark: "Sweet are
the uses of adversity."


Isaac Ellis Pedlow: There is one consoling
feature in connection with the contest, and that is that at almost every point where the hon. member for Brome and myself appeared the results were in favour of the Liberal candidate.


John Wesley Edwards: I rise to a point of order. I maintain that the hon. gentleman (Mr. Pedlow) is not in order in discussing a political campaign out in Saskatchewan under the heading of this resolution.


Georges Henri Boivin: I have had some difficulty in hearing the hon. member but if he is discussing a political campaign he is not quite in order.


Isaac Ellis Pedlow: I, as usual, have very
great pleasure in bowing to your ruling, Mr. Chairman. I was not aware that my musical voice was so soft as to produce a condition of slumber during the course of my remarks. I was answering a question asked by the hon. member for Red Deer. I have much pleasure in associating myself with the position taken in regard to hats by the hon. (member for Centre Vancouver and the hon. member for Strath-eona. There is a great deal in what both these hon. gentlemen have said on that subject. I have here a resolution passed by the manufacturers of hats and addressed to the Minister of Finance. I have no doubt he is fully aware of the substance of that communication. In brief, the proposition put up is this: There are six or seven fur hat makers in Canada. These hat makers have got a foothold in the business within the last five or six years, and they employ a great- many people. While the material that goes into the manufacture of a hat has increased 700 per cent since 1914, the manufacturer's price has increased only 400 per cent. A hat that was selling in 1914 at $2.50 or $3 has only been advanced 400 per cent which means that the retailer cannot sell a hat of that class at less than $10. It is really out of the question for any person to buy a hat to-day that will give him any service at all for $5 or $6. As a matter/ of fact I know that hats have advanced since springtime 45 per cent. They are costing 45 per cent (more than they did for the spring business. There is no such

thing as a $5 hat on the market except old styles and old stock that nobody wants to buy unless he is very economical and wants to economize as much as possible. I hope the minister will give consideration to the representations of the hat manufacturers of this country, and that he will be able to'comply with their request.


Willis Keith Baldwin: There has been considerable discussion as to what the tax means to the retailer, and the opinion has been generally expressed that goods will cost the consumer much more. I noticed during the discussion that hon. members overlooked the fact that the great departmental houses send their catalogues to the more remote parts of Canada, and as these great houses buy their goods, I believe, cheaper than most of the wholesalers, as country merchants have to conform their prices to the prices of the departmental houses-and I believe that the hon. member for Renfrew (Mr. Pedlow) is no exception to the rule -it is not at all probable that the conclusion at which many members have arrived will prove to be the correct one. Competition is very keen in the section of the country in which I live, not only between neighbouring merchants but between country merchants and departmental stores, because these catalogues go into every household. I think I am safe in saying that there is not a household in Canada that does not receive a catalogue at least from one of the great houses, and many receive them from several houses. Competition is such as to maintain reasonable prices. Trade is growing keener and keener, and harder and harder, for the retail merchant. Merchants who are actually engaged in business will find that is true.


Donald Nicholson: 
Mr. ARMSTRONG (Lambton):: They
have been collecting income tax for seventy-eight years.


Donald Nicholson: My hon. friend reminds me that in Great Britain they have had their income tax system worked out for seventy-eight years. Yet this Royal Commission reported they have been losing between seventydive and eighty million pounds annually that they have not yet been able to find -any means of collecting. Now, let me give you a homely illustration with regard to that. Go into the smallest city that you can find in the Dominion of Canada and ask the tax collector if he finds it very easy to collect the income tax equitably from all the people who pay it simply for the maintenance of the public school in that village, and see what answer you will get. He will tell you at once that the most difficult thing to be equitably collected is the income tax, and the only way you are going to do it equitably at all is to have an absolute head tax which everybody shall pay. That is what the collector will tell you. However I do not wish do dwell upon that. I. believe the plan of collecting the luxury tax through the excise method is a good one. I believe if put into proper operation it will yield 4 large revenue and will have the very result that the minister hopes for.
But just a word about the details. The last time I spoke on this subject I gave the House some figures I had worked out in connection with a certain retail store, which figures I claim are not over the average. I found there were 100 transactions in one day's business, and that it would take 43

pages of foolscap to contain the monthly statement to be transmitted to the department. On the same average that that retailer was collecting on his sales-and he sells about the usual kind of goods retailed throughout this country-in order to collect $1,000,000 in taxes 10,000,000 entries would be necessary on the statements transmitted to the department. Every Single one of those statements will have to 'be checked against the accompanying slips if the department is to be -certain of the correctness of the returns. This will mean, on the one hand, adding enormously to the retailer's costs, and, on the other 'hand, clogging the department with extra officials to do this work.


Joseph Elijah Armstrong: In view of the changes made in the tariff in regard to ribbons, laces-, and similar commodities, the hon. member would not attempt to argue that there would now be as many entries in a store such as he describes?	.


Donald Nicholson: 
Jacques Bureau: Are you talking from experience?


Donald Nicholson: You have all those things to contend with. I say again that as a first choice I urge upon the minister and the Government to go back to the point of production and importation for the collection of the tax; but failing that, I would advise the employment of inland revenue stamps to get away from the mass of work and the temptation to defraud in connection with the other method of collection.
The hon. member for South Renfrew (Mr. Pedlow) stated that he understood the minister to say that he intended to stand or fall by the resolution. That is not my understanding. I gathered that he was dealing with the subject with an open mind. I have only one desire-to assist if I can. Perhaps I am wrong; if I am, I am ready to stand corrected. I am simply giving my ideas to the minister for what they are worth, and I hope he will take them into his serious consideration before coming to a final conclusion on this method of tax collection.


Fred Langdon Davis: It seems to me, Mr. Chairman, that there must be some misunderstanding as to the number of retail storekeepers in this country, for if there are 200,000 or 250,000, that is equivalent to one storekeeper to every 45 or 30 people, which does seem unreasonable. Basing my estimate on districts I am familiar with, I would say that there is about one store to every 250 or
400 people. But even that means that we have to go back to something like 40,000 storekeepers to collect this tax. We all know that tax collection is not tod easy, and that the fewer people you have to deal with the more productive the tax will be, the more economically it will be collected; and as some one has said, you will " get your feathers with the least squawking possible." The very fact that this tax has caused so much commotion is a warning to the minister to get it, if possible, at the point of production as the member for Algoma (Mr. Nicholson), has suggested. I fully agree with him that that is the point at which this tax should be applied. It seems to me that the minister said he believed that would be the most economical for the Government, and probably the most productive. Then what are the objections to that method? Following his mind as nearly as I can, I judge that it is because the tax, not being taken directly out of the consumer's pocket, becomes an indirect tax. That will apply mainly to the luxury tax. I have understood that the department is not calculating that a very great sum is going to be derived from this tax, perhaps $10,000,000 or $15,000,000, but that the bulk of the amount that will be raised by these new taxes will be raised by the one per cent tax. I very much fear that the luxury tax will practically put out of business many firms. In trying to get some ideas on this tax I ran across the fact the other day that in Spain they had a tax on sales of .14 per cent. It was afterwards reduced to 10 per cent and later to 6 per cent. Both Spanish and English economists agree that that tax was the cause of the ruin of Spanish industry and Spanish agriculture. Now this tax on luxuries is going to exceed on the average this 14'per cent tax in Spain. I agree that taxes should be collected where there is ability to pay, but at the same time you must have regard to the existence of businesses, and some businesses are sure to be greatly hampered and very likely ruined by the excessive amount of these taxes. Hence, I judge they will exist for only a very short time. After they have been applied for a year I believe they will be ameliorated, if not entirely wiped out.
Now the department has had some experience in the collection of a tax of this kind-experience in two ways. I have understood from members of the department that the tax on matches, amounting to over $1,500,000, is being collected by about three

men. On the other hand, the stamp taxes have caused untold anxiety to the department, very much expense and a great deal of perturbation. There have been prosecutions all over the country for violations of the Act respecting this tax which is collected from the consumer. It seems to me that this should be a warning to the Government as to what is likely to happen when this luxury tax is applied, if it is placed on the consumer instead oif at the point of production.
There are other things I might say but I think those are the most important.


William Duff: There is a little information I should like to get from the Minister of Finance. I should like to know if he or his department has made any estimate as to how much it is going to cost the country to collect this tax from the retailer; how many officials .will be employed at headquarters at Ottawa to check the returns as they come in; and how many will be employed all over the country to see that the retailers make out the returns properly and -record the sale of every article which should pay a tax. It seems to me that it will take an army of officials, anywhere from 5,000 to 10,000, to look after the collection of this tax. That means not only a great initial expense to the country, but I presume that when we get through with our present financial difficulties this tax will be dropped, and that these 5,000 or 10,000 officials which the minister proposes to take from the farm, the fisheries, the mines, and lumbering camps, will be added to the already overmanned Civil Service. If there is any possible way of collecting this tax without appointing more officials, it should certainly be done. I think I understood the minister to say this afternoon that -practically no Officials had yet been added to the department. My information from a reliable source is that the very first day after the minister made his Budget Speech fifty new officials were taken on by the Inland Revenue Department to make out the proper forms in connection with this tax. It seems to me that to take men out of productive industry and put them into a position where they are not producers, but drones, especially in view of the country's finances, is to do the very opposite of what we should do. We should be getting men out df non-productive employment into work where they would be real producers. I would strongly urge on the minister that

the proper place to apply this tax is at the source of the goods.
The minister said in answer to a question that this resolution should be considered separately from the one dealing with the one per cent tax. But the three taxes dovetail so -into one another that we cannot discuss them separately: the one per cent tax must first be got from the manufacturer selling to the wholesaler, secondly, from the wholesaler selling to the retailer, and thirdly comes this luxury tax which is collected by the retailer. I repeat that the proper place to apply this tax is at the source of supply, where the article is imported or manufactured, instead of having an army of officials added to the present staff to look after the collection of the tax. Then the Government wmuld not have' to have these officials going round seeing that the retailer made up a proper statement. By this method they wmuld get every dollar of taxation that was due, and would get far more revenue than they will under this method proposed by the Minister of Finance.


Henry Lumley Drayton: Does the hon.
gentleman want the information he asked for before he went on and made his-speech?


William Duff: I am not going to allow the minister to insinuate that I cannot make a speech if I want to. Perhaps my remarks will be listened to just as attentively as some of the remarks he made this afternoon.


Henry Lumley Drayton: I did not know whether the information was desired.


William Duff: It is desired; I asked for
it in the form of a question, and I want it.


Henry Lumley Drayton: I want to give it.


William Duff: Don't talk so much about it.


Henry Lumley Drayton: I could not tell the hon. gentleman just how many men are working on this particular matter at the present time. As I have told the House several times, the collection is by -the Department of Inland Revenue, and the latest information I have on the subject, which I cannot vouch for personally, is that one man, who was borrowed from another department, is employed on this work with two stenographers. If I was asked to make a guess as to the number of men to be employed here at Ottawa for the purpose of checking, I should say about one hundred.


William Duff: I did not ask the Finance
Minister to do any guessing. The people of

this country expect him to do more than guess. It seems to me that if he is going to deal with this matter in a businesslike way he should have had some idea before he brought down the Budget how many officials it would take to collect the taxes under his proposals, and the probable cost. It is not very creditable for the minister to give out to the House and the public thait he has no information as to how many officials will be required or the probable cost of collecting the tax, but can only " guess."


Michael Clark: I should like to ask the minister a question or two in elucidation of the point raised by my hon. friend, (Mr. Duff). Does the minister regard these taxes as likely to be temporary or permanent in the country?


Henry Lumley Drayton: I would regard these taxes as taxes which will be permanent if they work out properly. I do not know how they will work out. I do not know that I am any better prophet than anybody else as to their working out. The money is required and this seems to be one way in which money may be obtained. We hope these taxes will work out properly, we have no particular reason to doubt that they will work out properly; and if they work out properly, with the tremendous liabilities the 'Country is under, I would think they would have to be retained. If they do not work out properly, my hon. friend probably knows what would happen.


Michael Clark: As- to their
working out, can the minister give as to how many retailers in any portion of Canada beginning at Ottawa, are collecting these taxes and how many are not? I have correspondence from some who are not collecting them; I have correspondence from others who are. Has he given any direction to the retailer which gives him any guidance as to the scientific method of collection? We want this information so that we may know whether the minister has control of his department.


Henry Lumley Drayton: The hon. member knows perfectly well-and there is no good repeating it-that I am not collecting these taxes. That is not in my department, and it is idle at the present time, with a matter as new as this, to expect anything like a definite report upon what either John Jones or John Smith is doing and what the percentage of payments here or there may be. We do not know. It is impossible to tell.


William Duff: We should have this information before we go very much further.
The minister says that some one else is responsible for the collection of the taxes. In that case, we should have the Minister of Inland Revenue here to give us the information, or the minister should have it himself. A large amount of expense is going to be entailed in collecting these taxes, and yet the minister is asking the committee to suggest to him the Ibest method of collecting them when he does not know what expense will be entailed in eol-. lecting them. If the minister cannot tell us how much it is going to cost to collect the taxes, some other minister should give us that information, or some estimate should be given before we go very much further.


Michael Clark: Does my hon. friend not think that it is a frightful state of confusion for the affairs of this country to be in that in various localities some retailers are already collecting these taxes and others are not? I want to bring that home to my hon. friend, because I know what I am talking about, and probably every other hon. member in the Chamber knows that in certain localities some retailers have now accepted the position imposed upon them of being involuntary collectors of taxes for this Government and others have refused the position; some retailers are collecting the taxes, others are not. I should like the minister to tell us whether he does not think that an awful state of confusion for these taxes to have reduced the country to.


Henry Lumley Drayton: I would be very much obliged to my hon. friend if he would give me the names of those retailers who are breaking the law. It would assist very much if he would do so. But I should like to say this to the hon. gentleman, that he cannot put into operation any new method of direct taxation without trou-
11 p.m. ble and difficulty, and there is one way in which that difficulty, annoyance and uncertainty Vill stop, and that is by adopting these resolutions at the earliest possible minute. What is the use of talking of getting up machinery and having prosecutions at the present moment, before these resolutions are adopted? You cannot possibly expect to put into force new methods of taxation without trouble, and I certainly do not expect to be able to do so. It takes some time for people to understand what they have to do, and it may be that some of the retailers to whom my hon. friend refers do not know what they ought to do. I do not know what my hon. friend's suggestion is in connection



with a man who honestly does not know -whether my hon. friend thinks he should be prosecuted or not. My view is that, in connection with a new law and a matter which is the subject of so much debate as this is, reasonable treatment ought to be accorded. But it is idle to hope for any definiteness in the country until this House has passed upon these proposals. It will be unreasonable, further, to expect that prosecutions will take place until the House has acted1 in the premises.


Michael Clark: My hon. friend asked me for names. That is very cheap. I shall be glad to give him the names of my correspondents,-
. Sir HENRY DRAYTON: I shall be glad to have them.


Michael Clark: -and every hon. member in this House who has similar correspondence would be glad to do so. If I do give them, according to his own showing, the minister would not prosecute. Would he give directions? Has he given directions? Have directions been issued from Halifax to Vancouver as to how these taxes are to be collected? It is a far cry from prosecutions, which I am the last man to call for in connection with new taxes, to directions how the taxes are to be collected. Has my hon. friend's department or any other department of the Government given directions? The facts are as I have stated them,-and the minister knows that and other hon. members know it,-that some retailers are collecting the taxes and others are not; and some have written to us asking whether they have to collect them or not. We can only come to the minister for answers to those questions.


Henry Lumley Drayton: I shall be
pleased to answer the question. Instructions were given. They went out the night of the Budget Speech.


William Duff: A few minutes ago the minister said that, if we allowed these resolutions to go through quickly, he would be able to put into motion the machinery to collect these taxes. I must disagree with that statement. As I said before, the minister has not hie department properly organized or the other minister upon whom my hon. friend has tried to shove the blame has not his department properly organized to collect this tax, because it is a well-known fact that if the first resolutions as introduced by the Minister of Finance on May 18 were not changed at this late date, he would not be able to make that state-
ment. Is it not a fact that the taxes went into effect the moment the minister made his Budget Speech on May 18? Why does the minister now tell the committee and the people of Canada that when he made the Budget Speech he had no machinery by which to put his tax proposals into effect, either to see that the retailer makes the proper statement or to see that officials are appointed to look after the returns? Does the minister -want it to go out to the country that he had no machinery to collect the taxes when they went into effect on May 18?


Henry Lumley Drayton: I am afraid I
expressed myself loosely and improperly. I am sure that is not the hon. gentleman's fault; the error must be mine. I said that instructions went out the night the Budget Speech was delivered.


Michael Clark: In what form
did they go out? Did they go out to every retailer in the country?


Henry Lumley Drayton: No.


Michael Clark: In what form
did they go out, because we have a right to know that?


Henry Lumley Drayton: The notification went out to every single collector of inland revenue in the country, with instructions to notify people selling in his district. Further than that, of course, the announcement was made and pretty well covered in the press. It is just as quick a notice as is ever given or ever has been' given.


William Duff: Would the collector of inland revenue know the names of the retailers in his district?


Joseph Elijah Armstrong: In answer to the hon. member for Lunenburg (Mr. Duff), I might say that last week it was my privilege to go in the direction of my home. I spent Thursday afternoon in the - city of London where I purposely visited a number of stores, large stores as well as small ones, and made inquiries in regard to this tax. I found also that the Inland Revenue Department in that city were actively engaged in collecting the taxes, and the managers of several of the stores that I visited were frank in telling me the manner in which the taxes were being collected,- they said that on the whole they were well satisfied with them, and especially since the minister has made his changes in connection with this Budget, I feel confident that the people in those districts are well satisfied and are ready and willing to pay

over the money. In fact, they have been collecting the money and paying it into the Inland Revenue Department. If you go further, to the town in which I live, a place of four or five thousand people, you will find that the Inland Revenue officer not only notified all the stores in that little district but sent his assistant into every place where an automobile was located that had not been disposed of and collected the tax. I certainly was agreeably surprised to see the manner in which the tax had been collected and to learn the very prompt way in which the people had carried out the instructions that had been sent to them the day after the Budget was delivered.


Mr. COPP:: If I understand my hon.
friend correctly, he said he visited a number of towns before the changes were made by the Minister of Finance and found the dealers were perfectly satisfied with the Budget and the collection of the taxes.


Joseph Elijah Armstrong: I did not say they were perfectly satisfied with the Budget as it existed- at -that time; but with the changes made by the Minister of Finance, I feel confident that the bulk of -them are -satisfied, or at least as well satisfied as you can expect people to be when you are collecting -a direct tax from them. ,


Arthur Bliss Copp: I understood my hon. friend to say that on Wednesday last they were well satisfied with the arrangement. Perhaps I was wrong in representing him as having said they were perfectly satisfied, because you could not expect any one to be absolutely and entirely satisfied1 with a new piece of legislation. I am -prepared to grant that. But if I understand this matter correctly, judging from my own experience and having received numerous telegrams and letters not only from individuals in my own constituency but circular letters enclosing statements which the writers said were copies which they had filed with the minister protesting earnestly and vehemently against the arrangement for collecting the tax, then the hon. gentleman is not quite right-.


Joseph Elijah Armstrong: Have not a number of those people been satisfied by the changes made?


Arthur Bliss Copp: I am coming to that. I
understood my -hon. friend to say that the people to whom he referred -were Well satisfied prior to these changes. If -that, is so, it does seem to me that the minister's position is somewhat strange. Realizing the 2214
great responsibility that rested upon him for the raising of taxes in order to provide the money requisite for carrying on the affairs of the country, realizing that he was in/ a position of high responsibility, he came down deliberately to a deliberative Parliament and presented his Budget after months of consultation, and no doubt anxious study, for I am prepared to admit that he must have devoted considerable study to the preparation of his task. On the 8th of May he presented his Budget, after serious consideration; and now we have to understand that this was only a hodgepodge affair, not properly considered, not properly conceived, and not properly informing the public of what they would be expected to do. He made his speech in this 'House and we were all very much pleased, I have no doubt, to hear the hon. gentleman; and for two weeks the eloquence of hon. members resounded through the Chamber telling of the great courage which the Minister of Finance had displayed in the manner in which he had brought, down his Budget asking the people to- dance to the tune that he at that time was playing. He had thousands of copies of that speech prepared -for distribution. I did not ask the minister why that speech was printed, but I take it for granted that the object was to permit hon; members to send it broadcast over the country in order to instruct the merchants, retailers and wholesalers, and all those engaged in business transactions from the Atlantic to the Pacific, as to what would be expected of them. That speech has been distributed; it is in the -hands of all business people. For ten days they have "carried on", and I have no doubt -the statement that has been made is correct, that a very large number of merchants have been collecting the tax. Whether it was proper or improper was not a question for them; they had to obey the law. They have collected this money, and notwithstanding that my hon. friend from East Lambton says that the peo-ple in his town were well satisfied, the minister co-mes- and says: "I am going to change all that. We were all wrong. The retail dealers, the business men who sent telegrams and circular letters, the boards of trade who sent petitions are all right and I am all wrong, and therefore I am going to change this thing". I would ask my hon. friend if he is going to stand by the Budget he has brought down or whether we are to expect that in a day or two, after he has received some letters and telegrams from

wholesaler, or the importer-as it is my opinion they should be-that will mean added .cost to the consumer because that expense will ultimately reach the consumer. I am not so sure that he is right in that regard. The first thing that a merchant, in the country or in the city, will have to do will be to make additions to his staff to look after the extra clerical work necessarily involved in the collection of these taxes.
A few days ago I had representations from a merchant in my constituency-out o.f many I have had-who has three retail stores. He tells me that not only will the added expense to his business be very great, but that he practically will have to scrap his . whole sales system and introduce a new plan in order to 'furnish the Finance Department with the extra invoices they require. The whole of that expense will he added to the cost of the business done by the merchant and it will simply mean an addition to the price to the consumer. I am therefore not so sure that the method of collecting from the manufacturer, the wholesaler or the importer will prove more expensive in operation than the method proposed by the Minister of Finance. And even if that result did follow, the economy that could be secured in the administration of these taxes at Ottawa-and elsewhere throughout Canada where offices would1 have to be established by the .minister-would justify the method of collecting these taxes from the importer, the manufacturer and the wholesaler. It is essential, Mr. Chairman, that these taxes be paid if we are going at the business seriously. There is nothing that will prove more demoralizing -to the people of this country than for the impression to grow in the public mind that these taxes can be evaded; and I am very certain of this-that the minister cannot devise machinery that will adequately insure their collection by all the retailers. That, to my mind, forms one of the strongest justifications for a change in method.
I would therefore urge, in the best of good temper, that my hon. friend should reconsider the matter, and that he accept the suggestions that have come-not only from hon. gentlemen on this side but even with greater .force from members on his own side. We all want to arrive at the best solution of this question; I am sure of that. I for one appreciate the difficulties that confront the Finance Minister-but after all I am convinced that this method of collecting taxes from the retailers will not only be unpopular throughout the country-which per-

haps does not matter so much-but will prove expensive, and inadequate, and will lead to wholesale violation of the law. That is not to be desired in any system of collecting taxes. We have discussed the matter now, Mr. Chairman, for a couple of hours, and perhaps, my remarks might more properly come under section 2, but I understand that I shall be in order in moving an amendment. I therefore move:
That the resolution be amended by striking therefrom the second paragraph of the said resolution and substituting therefor the following paragraph:
"That the excise taxes as imposed by the preceding resolution shall be paid by the manufacturer, or wholesaler at the time of sale, or on importations at the time of importation in addition to the duties of customs already imposed ; and by the manufacturer or wholesaler, to His Majesty in accordance with such regulations as may be prescribed."


William Stewart Loggie: I wish to say a word or two regarding the amendment just submitted, and to give some further reasons why I think the proposal of the minister is the better plan. First of all we must not forget that we have a vast sum to raise annually, and this money must be obtained through the customs and by direct taxation. The proposal to collect luxury taxes through the retail merchants is, I admit, surrounded with difficulty; but no great reform or change in the mode of collecting taxes could ever be undertaken without difficulty. The minister has told us how these difficulties will be overcome, but he has not all his plans formulated.


Michael Clark: That is a good word.


William Stewart Loggie: However, he tells us what taxes will be collected, that they will be collected from those who -are best able to pay them, and the method of collecting them. Now I want, if I can, to point out the advantages that are involved to the people of Canada, and when I speak of the people of Canada .1 speak of them as represented by the Government. The Government of Canada represent the people of this country.	'


Some hon. MEMBERS:: Oh, no.
Mr. LOGGIE-: Well, this Parliament represents the people.


Some hon. MEMBERS:: No.


William Duff: Not this Government at any rate.


William Stewart Loggie: I want, if I can, to point out some advantages that accrue to the

people of Canada in connection with raising the necessary revenue. The tax on luxuries, collected through the retail merchants as proposed, will on the original value of imports give the Government about 875 per cent more revenue, without any extra cost to the consumer. If it does that, is it not a fair guess that it will save the consumer taxes from some other source? But it does more than that. It impresses buyers of luxuries with the fact that they are directly paying some of our war expenditures, and it fosters the buying of goods that are not classed as luxuries. The proposal is definite and clear that goods coming under the class of luxuries are passed on to the consuming public on the basis of the retailer putting his profit only on the cost of the goods under the regular tariff. Then the retailer says to the consumer: In order to pay interest on the war debt the Government requires an extra ten per cent on any high class article that is designated a luxury. And the whole of that tax goes into the coffers of the people of Canada, represented by the Government.
Now, in order to illustrate to hon. gentlemen opposite in the clearest manner possible *what I have been stating, I have 'here two tables illustrating the results. I take an invoice of silks and laces valued at the custom house at $10,000:
Luxury tax paid by importer and absorbed in
sales:-
Invoice of silks and laces	 $10,000
Add luxury tax if by customs tax....	1,000
Cost of goods to wholesaler	 $11,000
Add wholesaler's profits, 25 per cent.. 2,750
Cost of goods to retailer	 $13,750
Add retailer's profit	 6,875
Cost of goods to consumers	 $20,625


Arthur Bliss Copp: Would the hon. gentleman
permit me a question? Is that fifty per cent retailer's profit real or fictitious?


William Stewart Loggie: That is the average profit of a retailer selling silks. I do not think he could afford to sell silks at less than fifty per cent profit.	.


William Duff: That is a pretty good profit.


William Stewart Loggie: Now, the point I want to make is that on those goods which cost the consumer $20,625 the Government gets only $1,000 if the tax is collected on the principle of the amendment before the House. But let me now point out what tax will accrue to the treasury if the Government's proposal is adopted:
Luxury tax collected by the retailer:-
Invoice of silks and laces	 $10,000
Add wholesaler's profit, 25 per cent.. 2,500
Cost of goods to retailer	 $12,500
Add retailer's profit, 50 per cent		6,250


[Stage Direction]
Add 10 per cent luxury tax	 1,875
Cost of goods to consumers	 $20,625
In-this case the cost to the consumer is $20,625, or exactly the same as if the tax were collected through the customs house and the Government got only $1,000, whereas in this case they get $1,875, or 875 per cent more. That is positively correct as far as I can figure it, and if hon. gentlemen opposite can point out any error I shall be glad to hear from them.
I have another table which is practically the same in principle, but I put the profits at a different rate, that is to- say, I have made the wholesaler's profit 10 per cent and the retailer's profit 25 per cent. Here the amount paid to the Government through the customs would be $1,000, but if paid through the retailer would be $1,375. Ile-member, Mr. Chairman, the cost to the consumer is the same, but these profits are not as they Teally would be, that is to say, they are much less than what the consumer would pay. However, the point I want to make is that allowing a profit of 25 per cent to the -wholesaler and 50 per cent to the retailer the Government would get 875 per cent more money, and the consumer would not pay a dollar more, under the proposals of the Minister of Finance. So far as I am concerned, therefore, I am prepared to vote against the amendment.
Henry Lumley Drayton: Mr. Chairman, one or two things ought to be pointed out before the vote on the amendment is proceeded with. Rightly or wrongly, a good many things have been said on the question of checking extravagance and waste, and I wonder if we are at all sincere in what we say. 1 wonder if we realize that what is proposed is that the poor man's boots shall be taxed with the cost of the rich man's luxuries. That is what this amendment amounts to. What is proposed is that instead of this tax being paid by the man who can afford to pay it when he makes the expenditure, it should be levied on the manufacturer or wholesaler as the case may be. Is anyone green enough to imagine for one minute that the goods on the shelves of the wholesaler or in the warehouse and factories of the manufacturer are going to be taxed from time to time in connection with this

luxury tax? Under the amendment the luxury tax will become part of the general cost of that manufacture, and you ask us to say that the poor man shall make up that cost. In a boot factory you have workmen's rough boots at say $4 or $5 or $6 a pair, and also boots costing $18 and $20 a pair. The whole effect of the amendment is to say that to that cost of the workmen's boot shall be added the costs to which the manufacturer is put because he carries on the manufacture of more highly priced lines. The taxes would not be luxury taxes at all in that case. They would be taxes on expenditure. They would be added costs to the manufacturer, which he could place just where he pleased, and if he found it easier to charge the whole of it on his cheaper lines of goods, leaving it off the more expensive he could do so. I do not believe that the hon. gentleman intends any such result, but that can only be the result. There is another thing, which I am absolutely sure was not intended at all, which goes to show how easy it is to make errors of this kind. The amendment seeks to replace section 2 with the following:
That the excise taxes as imposed by the preceding resolution shall be paid by the manufacturer or wholesaler at the time of sale, or on importations at the time of importation in addition to the duties of customs already imposed ;
Now, mark it, mark it.-


Michael Clark: Well.


Henry Lumley Drayton: Mark it well.
There are only two interests that are called upon to pay that tax, the manufacturer or the wholesaler. The retailer can import as much as he likes without paying any tax, because the word "importer" does not appear in the amendment, but simply the manufacturer or wholesaler.


Mr. CALDER:: What about the individual?


Henry Lumley Drayton: And there is nothing in the amendment to prevent the individual bringing in the highest-priced motors and automobiles without paying taxes. I am sure that the hon. gentleman could hardly have intended such a result as that. I am sure that the insinuation^ which could be easily made, that this is a studied worked-out policy in the interests of some retail concern would be false. It might be insinuated that this is something which has been worked up to enable some particular backers of my hon. friend to get in their automobiles free or that is something under which the grain growers, selling as they do direct to the public, and therefore being

neitiher manufacturers nor wholesalers, could entirely escape the tax; but I do not believe for one minute that any of those considerations was present with my hon. friend. I simply desire to point out to him just what his amendment means-just what its effect would be. For what reason? The reason is manifest.
I have been charged with changing my mind. I have changed my mind. I change my mind when it is shown to me that I am wrong, but I do not change my mind upon pressure or influence. Hon. gentlemen talk about the number of retailers in this country. Several speakers have mentioned 200,000. My hon. friend (Mr. McKenzie) got it up to between 400,000 and 500,000, while my hon. friend (Mr. Orerar) got it down to a much closer figure. If there are 200,000 retailers, there are 200,000 reasons for changing one's mind if pressure or influence is to be a reason why one should change one's mind. If any hon. gentleman can show that this amendment will help the common people of this country, and by that I mean all those iwho buy goods, and who are not manufacturers, not wholesalers, not retailers, and will not add to their costs, I will change my mind. But I am not changing my mind because 50,000 or 200,000 retail merchants want me to change it. I appeal to my hon. friend to forget for one moment that he and I do not agree. I would ask him to try to remember some of the principles for which he says he can honestly stand. I would ask him to remember what he thinks about a tax that can be made the source of an added profit to a manufacturer as against a suffering consuming public. My words are not quite the same as his; but the idea is exactly the same. And to-day he is faced with an opportunity of placing that tax direct, of seeing that not one single cent is paid more than the Government gets; that no profits whatever comes upon it; that that system of direct taxation which is to him so dear shall be maintained. But the suggestion is that that shall be all forgotten. Why, he says, there are 50,000 retail merchants who are objecting-and the indirect tax method is to be applied, and not one but two different sets of profits are to be made available on it. The issue is very plain and I do not know that I can usefully say anything more in connection with it.


Mr. CRERAR:: I will take but very few minutes to reply to some of the observations made by the Minister of Finance. It is at any rate quite clear that he persists in his desire to become an unpopular gentleman

in Canada. I want to make my position clear at the outset. I have objected to these taxes because many of them are absolutely unsound. The minister persists in calling them luxury taxes; but they are not luxury taxes at all; for the greater part they are taxes on absolute necessaries of life in this country. If my hon. friend is so desirous of looking after the poor man and the cost of living to the poor man then I would very seriously commend to him that he reconsider this whole tax business and cut out many of the taxes he has imposed on the necessaries of life. My hon. friend states further that one result of the adoption of my amendment will be that retailers will be able to import goods into Canada and thus escape the tax. I think I understood my hon. friend aright; but I cannot for one moment believe that he made that assertion in all seriousness because if he turns to section 7 of the resolution dealing with the one per cent tax that he is imposing under that section, and examines the language, he will find ithat it corresponds identically with the language I have used in my amendment. I was very careful to do that.


Henry Lumley Drayton: Will the hon.
gentleman allow me a moment, because'I am quite sure we should not be at cross purposes? It is quite right that the retailer there was not to be taxed; it was only a sales tax.


Thomas Alexander Crerar: The amendment states
that the tax shall be paid on importations into the country. Does that mean that a retailer can buy goods in another country and import them into Canada and thus escape the tax? If a retailer goes to the United States and buys a carload of goods for distribution amongst his different stores, does he pay the customs tax? I do not think he escapes that, and if he does not escape the customs tax, how is he going to escape this tax? The idea is absurd, and my hon. friend will realize that if he thinks it over for a moment. My hon. friend made, shall I say, an insinuation, which, I think probably when he considers the matter in the sober light of to-morrow, he will rather regret. He rather hinted that I might be interested in this because I was connected with a certain company that is making importations into this country. I rather regret my hon. friend made that insinuation. I think I am well enough known in this House to have my word accepted when I state that that thought was neveT in my mind for a second.


Henry Lumley Drayton: I gave my hon. friend absolute credit for that. I said that I was sure he had not that thought in mind.


Thomas Alexander Crerar: That furnishes an additional reason why the minister should not have made reference to the matter. But he says further-what good reason is there for changing this? I gave the reasons and I will give them again. If this tax is to be collected by the retailer, it will, in large measure, be evaded. My hon. friend can scarcely get house room enough in Ottawa to house the invoices and returns he is going to compel these retailers to make. If he gets a staff that is adequate to check the returns as they should be checked, a very large proportion of the tax that he will collect will be eaten up with expense. His method is an expensive one and will result in evasion of the tax, as is evident to-day. I have in my desk downstairs a letter which states that already pedlars and vendors of that kind are evading this tax as regards jewellery, drygoods and other commodities. If I had the letter here I would read it. How is my hon. friend going to collect the tax from these people? He is going to hurt the business of the retail merchant in this respect, and his system will inevitably result in evasion of the tax, with a consequent loss of revenue and a great deal of inconvenience to every retail merchant in Canada. I make the appeal to my hon. friend and to the members of the House in the best of good faith, that my hon. friend will find the strongest arguments in support of my amendment came from his own side this afternoon from reputable business men who knew what they were talking about. My hon. friend knows that this tax is an expensive operation and he will not get the revenue he expects) to get from it. For that reason, if for no other, the amendment should be adopted by the committee.
Amendment (Mr. Crerar) negative; yeas, 25; nays, 39.


Georges Henri Boivin: Shall the resolution carry?


Michael Clark: I understood that we were going to discuss this resolution in sections after the general discussion.


Henry Lumley Drayton: Quite so. I
move that the committee do now proceed to a consideration of the resolution paragraph by paragraph, and item by item.


Jacques Bureau: This is a very slim House and some hon. members might like to have

a discussion on the general principle on Monday afternoon.


Henry Lumley Drayton: Hon. members will have that- privilege when the different paragraphs and items have been separately considered and amended.


[Stage Direction]
Motion agreed to.
Progress reported.
[Stage Direction]
On motion of Rt. Hon. C. J. Doherty (Minister of Justice) the House went into committee to consider Bill No. 131 to amend the Criminal Code (French version), and Bill reported, and read the third time, and passed.
On the motion of Rt. Hon. Mr. Doherty the House adjourned at 12.14, Saturday.
Monday, June 14, 1920.